Forex Reserves Grows For Fourth Consecutive Week To Reach $561.16 Billion

The forex reserves of the country increased by $11.02 billion to $561.16 billion in the week ending December 2, according to the data released by the Reserve Bank of India on December 9. The country’s foreign exchange reserves have increased for the fourth straight week. The Reserve Bank of India asserted that the valuation gains were made after the US dollar declined against the rupee and other major currencies.

Market analysts predict that the RBI’s purchase of US dollars from the market reduced the rupee volatility.

The country’s foreign reserves increased by $31.17 billion between the weeks ended November 4, 2022, and December 2, 2022. According to RBI Governor Shaktikanta Das, the nation’s foreign exchange reserves, valued at $561.16 billion, can pay for almost nine months’ worth of anticipated imports for 2022–2023.

The forex reserves climbed by $14.72 billion during the week ending November 11 to reach $544.71 billion, marking the largest weekly increase in the previous 15 months. In recent sessions, the rupee has appreciated against the dollar as investors have purchased riskier investments in anticipation that the Federal Reserve will slow the rate of rate increases at its meeting next week.

The rupee increased by 10 paise on Friday to settle at 82.28 against the US dollar. On Thursday, it reached a low of 82.38 against the dollar. Foreign portfolio investors have purchased Rs 4,500 crore worth of shares from the domestic capital market so far in December. Foreign investors invested Rs 36,239 crore in domestic equities in the previous month.

In the previous week ended December 2, the foreign currency assets (FCA), a major component of the overall reserves, grew by $9.69 billion to $496.98 billion. The FCA fluctuates primarily as a result of the RBI’s purchases and sales of foreign currency, income from the use of foreign exchange reserves, receipts of foreign aid by the federal government, and adjustments due to asset revaluations.

The gold reserves rose by $1.09 billion to $41.025 billion during the reporting week.

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