India's forex reserves jump by $5.17B to $697B—reversing previous dip
What's the story
India's foreign exchange reserves have witnessed a significant increase, rising by $5.17 billion to reach $696.66 billion for the week ending June 6, data released by the Reserve Bank of India (RBI) on Friday showed.
The surge comes after a previous decline of $1.2 billion from near eight-month highs at $691.5 billion on May 30, RBI Governor Sanjay Malhotra revealed while announcing Monetary Policy Committee decisions earlier this month.
Breakdown
Foreign currency assets rise
The latest RBI data shows that foreign currency assets, a key component of the reserves, rose by $3.472 billion to $587.687 billion for the week ending on June 6.
These assets are expressed in dollar terms and include the effect of appreciation or depreciation of non-US units such as the euro, pound, and yen held in India's foreign exchange reserves.
Reserve growth
Gold reserves also saw a rise
Along with foreign currency assets, India's gold reserves also saw a rise during this period.
The RBI said that the country's gold reserves increased by $1.583 billion to $85.888 billion for the week ending on June 6.
Special drawing rights (SDRs) also witnessed an increase of $102 million to reach $18.67 billion, further contributing to the country's forex kitty growth during this period.
IMF contribution
Reserve position with the International Monetary Fund
India's reserve position with the International Monetary Fund (IMF) also saw a rise of $14 million to $4.4 billion in the reporting week, according to RBI data.
This further highlights the growth and stability of India's forex reserves during this period.
The central bank closely monitors foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in exchange rates without any pre-determined target level or band.