India’s forex reserves jump $6.3 billion to $696.99 billion on surge in gold holdings

Mumbai: India’s foreign exchange reserves rose sharply by $6.295 billion to $696.988 billion during the week ended May 8, mainly driven by a significant increase in gold reserves, according to data released by the Reserve Bank of India on Friday.

The latest rise comes after the country’s forex reserves had declined by $7.794 billion to $690.693 billion in the previous reporting week.

India’s foreign exchange reserves had earlier touched a record high of $728.494 billion in the week ended February 27.

However, reserves came under pressure after the outbreak of the Middle East conflict, which led to sustained interventions by the RBI in the foreign exchange market to stabilise the rupee.

According to the central bank’s data, foreign currency assets (FCAs), which form the largest component of the reserves, increased by $562 million to $552.387 billion during the reporting week.

The RBI said foreign currency assets expressed in dollar terms include the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.

Gold reserves recorded the biggest jump among reserve components, rising by $5.637 billion to $120.853 billion during the week under review.

Meanwhile, the value of Special Drawing Rights (SDRs) increased by $84 million to $18.873 billion.

India’s reserve position with the International Monetary Fund also rose by $12 million to $4.875 billion, the RBI data showed.

Meanwhile, the country’s foreign exchange reserves had registered a $2.3 billion increase in the week ending April 17.

The country’s forex reserves rose to reach $703.30 billion, the central bank said on April 28.

The movement in forex reserves continues to reflect India’s balancing act between managing external shocks and maintaining currency stability amid an uncertain global economic environment.

IANS