India’s foreign exchange reserves, as reported by the Reserve Bank of India (RBI), saw a decline to an 11-week low of $593.90 billion as of September 8. This marked a $5 billion decrease from the previous week, following a $4 billion increase in reserves recorded the week before.
The RBI actively intervenes in both the spot and forwards markets to prevent abrupt fluctuations in the value of the rupee (USDINR).
Fluctuations in foreign currency assets, denominated in U.S. dollars, encompass the impact of currency appreciation or depreciation of other currencies held within the RBI’s reserves.
India’s foreign exchange reserves also include its Reserve Tranche position within the International Monetary Fund (IMF).
During the week in which this forex reserves data was recorded, the rupee had neared a record low, reaching 83.2175, prompting intervention by the RBI.
At the end of the week, the rupee stood at 83.1850, reflecting a 0.2% decrease for the week.
FOREIGN EXCHANGE RESERVES (in million U.S. dollars)
- Sept. 8, 2023:
- Foreign currency assets: $526,426
- Gold: $44,384
- Special Drawing Rights (SDRs): $18,060
- Reserve Tranche Position: $5,034
- Total: $593,904
- Sept. 1, 2023:
- Foreign currency assets: $530,691
- Gold: $44,939
- Special Drawing Rights (SDRs): $18,195
- Reserve Tranche Position: $5,073
- Total: $598,897
This data underscores the dynamic nature of India’s forex reserves and their pivotal role in maintaining currency stability amid market fluctuations.