Mumbai, Aug 23: India’s foreign exchange reserves rose by $1.49 billion to $695.11 billion for the week ended August 15, data released by the RBI on Friday showed.The increase comes on the back of a $4.75 billion surge to $693.62 billion during the preceding week ended August 8, reflecting the stable external balance position of the country.
An increase in the country’s foreign exchange kitty gives the RBI more headroom to strengthen the rupee vis-a-vis the US dollar. Adequate forex reserves enable the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall and curbing its volatility.
For the week ending on August 15, foreign currency assets, a major component of the reserves, increased by $1.92 billion to $585.9 billion.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
The gold component of the forex reserves stood at $85.67 billion. Central banks worldwide have accumulated substantial amounts of gold as a safe-haven asset in their foreign exchange reserves amid uncertainty created by geopolitical tensions.
The share of gold maintained by the Reserve Bank of India (RBI) as part of its foreign exchange reserves has almost doubled since 2021.
The special drawing rights in the forex kitty stood at $18.78 billion.
India’s foreign exchange are sufficient to fund more than 11 months of goods imports and about 96 per cent of external debt outstanding,RBI Governor Sanjay Malhotra said recently.