India's forex reserves rise by $2.3B to $700B
What's the story
India's foreign exchange reserves have increased by $2.29 billion to reach a total of $698.95 billion for the week ending on June 13, according to data released by the Reserve Bank of India (RBI).
The rise was mainly due to an increase in foreign currency assets, which rose by $1.73 billion during this period and now stand at a value of $589.42 billion.
Market intervention
RBI's role in managing forex reserves
The RBI plays a crucial role in managing India's forex reserves. It intervenes in the market through liquidity management, including dollar sales, to prevent a sharp depreciation of the Indian rupee (INR).
The central bank carefully monitors foreign exchange markets and only intervenes to ensure orderly conditions by curbing excessive volatility in exchange rates.
This is done without any reference to a pre-determined target level or band for the currency value.
Reserve breakdown
Gold reserves, SDRs, and IMF position
The RBI's data also shows that gold reserves increased by $428 million to $86.316 billion during the week under review.
Special Drawing Rights (SDRs) also saw an increase of $85 million, bringing their total value up to $18.75 billion for this period.
Further, India's reserve position with the International Monetary Fund (IMF) rose by $43 million to a total of $4.45 billion in the reporting week.