Experts in the field also indicated a possibility of the central bank buying dollars in the spot or taking delivery in the forward markets.
The reserves rose to $572.801 billion, the highest level seen since February 10. Foreign currency assets surged by $10.5 billion to $505.348 billion while the value of gold with the central bank rose $2.2 billion to $44.109 billion, Reserve Bank of India data showed.
Reserves held with the International Monetary Fund also rose by $127 million.
“The sharp rise in forex assets may have been due to a combination of positive valuation impact in reserves held in other global currencies and gains in long term foreign currency bonds as US yields plunged,” said Anindya Banerjee, vice president — currency derivatives & interest rate derivatives at Kotak Securities.
“There could also be some bit of spot buying, he said.
RBI does not offer reasons behind rise and fall in forex reserves.This is the fourth time since November 2022 when reserves saw accretion in excess of $10 billion. In the preceding week, the reserves fell by $2.4 billion.
The highest level of reserves seen this year was $576.761 billion at the end of January 27.
The all-time high for India’s forex kitty was at $642.453 billion on September 3, 2021. The RBI sold a massive $120 billion from its coffers between September 2021 and October 2022 to curb volatility and smoothen the local currency’s depreciation. The reserves were somewhat replenished in November and December 2022 with net dollar purchases by RBI.