In the week ending January, the reserves had increased to $723.8 billion, strengthening the country’s buffer against external shocks and ensuring import cover for over 11 months.
Speaking last Friday, central bank chief Governor Sanjay Malhotra had said the bank remains well placed to manage India’s external financing needs in the current global environment.
Meanwhile, fresh data released by the RBI showed a dip in foreign currency assets (FCAs) — the largest component of the reserves — which declined by $7.66 billion to $570.05 billion during the week.
FCAs account not only for shifts in the US dollar but also for changes in the valuation of other major currencies, including the euro, pound sterling and Japanese yen, which form part of the RBI’s reserve portfolio. As a result, movements in these currencies can influence the overall reserves position even in the absence of significant capital flows.
Gold holdings also recorded a sharp drop by $14.2 billion to $123.47 billion. Meanwhile, Special Drawing Rights (SDRs) decreased by $132 million to $18.82 billion, while India’s reserve tranche position with the International Monetary Fund (IMF) edged down by $32 million to $4.71 billion.