India's forex reserves jump by $4B to hit $698B
What's the story
India's foreign exchange reserves increased by $4.03 billion to reach a total of $698.26 billion for the week ending September 5, data released by the Reserve Bank of India (RBI) today showed. The previous week's reserves had also seen an increase of $3.51 billion, reaching a total of $694.2 billion for the week ending August 29.
Stats
Breakdown of India's forex reserves
The latest RBI data also revealed a detailed breakdown of India's forex reserves. For the week ending September 5, foreign currency assets (FCAs), the largest component of these reserves, rose by $0.54 billion to $584.47 billion. Gold reserves also witnessed an increase during this period, rising by $3.53 billion to stand at $90.29 billion for that week.
Reserve details
SDRs, IMF reserve position
During the reporting week, Special Drawing Rights (SDRs) fell by $34 million to $18.74 billion. However, India's reserve position with the International Monetary Fund (IMF) increased slightly by $2 million, bringing it to a total of $4.75 billion.
Market stability
RBI's intervention in forex market
The RBI occasionally intervenes in the forex market through liquidity operations like dollar sales, to control sharp fluctuations in the rupee. However, officials have clarified that these interventions are not aimed at achieving a particular exchange rate level or band but rather maintaining orderly market conditions. This is crucial for ensuring stability and preventing excessive volatility in India's currency exchange rates.