MUMBAI, Nov 19 (PTI): India’s foreign exchange reserves soared by USD 14.72 billion to reach USD 544.72 billion for the week to November 11, making it the steepest accretion since August 2021.
However, the reserves have fallen by over USD 110 billion since March as the RBI has been propping up the rupee amid global volatility.
According to the latest weekly data from the Reserve Bank, the forex kitty swelled by USD 14.72 billion to USD 544.72 billion for the week to November 11. The reserves were at USD 529.99 billion as of November 4.
Of the total addition, the value of foreign currency assets, which is the largest component of the reserves, rose by USD 11.8 billion to USD 482.53 billion for the reporting week.
Foreign currency assets consist of the effect of appreciation or depreciation of non-US currencies like the euro, pound, and the yen held in the foreign exchange reserves.
Gold reserves increased by USD 2.64 billion to USD 39.70 billion.
In the week to October 21, the reserves had fallen by USD 117.93 billion to USD 524.52 billion.
The reserves had climbed by USD 16.7 billion in the week to August 27, 2021, but the addition included USD 12.6 billion of one-time COVID restructuring support from the International Monetary Fund (IMF).
According to a treasury head at a private sector bank, the record USD 14.7-billion surge is due to the impact of an estimated USD 8 billion worth of recent overseas currency purchases by the RBI. The sharp jump is also driven by a softer dollar and changes in the central bank’s forward book.
According to the Reserve Bank’s weekly statistical supplement, despite the massive accretion in the reporting week, the forex kitty is still down from around USD 630 billion at the beginning of this year. The reserves peaked in September 2021 at over USD 642 billion.
The RBI has sold a portion of the reserves to prevent a sharp fall in the rupee since the Ukraine war began.
The Reserve Bank has sold USD 10.36 billion worth of foreign currency on a net basis in September. The rupee tumbled from around 79.5 per dollar to over 81.5 in September. It plunged to a record low of 83.29 in October.
The rupee climbed 2.3 per cent between October 21 and November 11, and closed at 81.74 on Friday, down 10 paise.
The rupee logged its first weekly fall in four weeks due to weakness in Asian currencies. The domestic unit declined by 96 paise or 1.18 per cent in the week to Friday.