India’s forex reserves continue to rise for three weeks

India’s foreign exchange reserves rose by USD 3.03 billion to USD 576.761 billion in the week ending on January 27, according to the Reserve Bank of India’s latest data. The reserves are currently at their multi-month highs with the latest three consecutive weeks’ rise, the RBI’s Weekly Statistical Supplement Bulletin said. During the week that ended on January 20, the reserves rose by USD 1.727 billion to USD 573.727 billion. According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, rose by USD 2.660 billion to USD 509.018 billion. Gold reserves rose by USD 316 million to USD 44.027 billion. At the start of last year — 2022, the overall forex reserves were at about USD 633 billion. Much of the decline can be attributed to RBI’s intervention and a rise in the cost of imported goods. In October 2021, the country’s foreign exchange reserves reportedly touched an all-time high of about USD 645 billion. Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee. Meanwhile, in the Economic Survey for 2022-23 tabled in the Parliament on January 31, the government said foreign exchange reserves are comfortable and external debt is low.