RBI Reports Rise of $ 653.97 billion in India's Foreign Exchange
The Reserve Bank of India reported that India's foreign exchange reserves rose by $15.26 billion to $653.97 billion in the week ending March 7, 2025.
The Reserve Bank of India said on Friday that India's foreign exchange reserves dropped $1.7 billion to $638.69 billion for the week ending February 28, 2025.
Foreign currency assets (FCAs) increased by $13.93 billion to $557.28 billion, as per the RBI's Weekly Statistical Supplement. The impact of the appreciation or depreciation of non-US currencies such as the euro, pound, and yen held in foreign exchange reserves is included in the FCAs, which are expressed in dollar terms.
The amount of gold reserves increased by $1 billion to $74.32 billion. SDRs for the aforementioned week, on the other hand, rose by $212 million to $18.21 billion. IMF reserves increased by $69 million to $4.1 billion.
In order to keep the rupee-dollar exchange rate from fluctuating too much, the RBI actively controls its foreign exchange reserves through market interventions. The central bank maintains sufficient reserves for financial security and guarantees rupee stability by selling dollars when necessary.
In an effort to keep the rupee from depreciating sharply, the RBI occasionally steps in to manage liquidity in the market, including by selling dollars.
With no regard to any pre-established target level or band, the RBI keeps a careful eye on the foreign exchange markets and only steps in to keep the market orderly by limiting excessive exchange rate volatility.
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Strong capital inflows, healthy foreign investments, and steady trade balances are all indicated by the increase in foreign exchange reserves. According to analysts, this growth may be the result of remittances, a rise in foreign portfolio investments (FPI), and a more optimistic outlook for the world economy.