The increase comes amid heightened global financial volatility and intermittent pressure on the rupee, which has traded with a depreciating bias in recent weeks due to a stronger US dollar and elevated US bond yields. The accretion in reserves signals towards RBI’s continued efforts to maintain adequate external buffers and smooth excessive currency movements.
Foreign currency assets (FCA), the largest component of the reserves, edged up by $184 million to $559.61 billion during the week. Gold reserves recorded the sharpest increase, rising by $2.95 billion to $113.32 billion, following a $2.62 billion gain in the preceding week. The rise reflects valuation gains as well as the central bank’s ongoing strategy to diversify its reserve assets.
At nearly $697 billion, India’s forex reserves remain close to their historical highs and provide cover for 9-10 months of imports, offering a strong cushion against external shocks even as global financial conditions remain tight.