India’s foreign exchange reserves rose by $1.853 billion to $595.051 billion in the week ended on June 30, according to the RBI’s latest data. The overall reserve had dropped by $2.901 billion to $593.198 billion in the previous reporting week.
In October 2021, the country’s forex reserve had reached an all-time high of $645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments. For the week ended on June 30, the foreign currency assets, a major component of the reserves, increased by $2.539 billion to $527.979 billion, according to the Weekly Statistical Supplement released by the RBI.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Gold reserves dropped by $472 million to $43.832 billion, the RBI said.
The Special Drawing Rights (SDRs) were down by $95 million to $18.239 billion, the apex bank said. The country’s reserve position with the IMF was down by $118 million to $5.002 billion in the reporting week, the apex bank data showed.
Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP, said, “The rupee oscillated Between 81.75 to 82.75 during the week as the dollar inflows from corporates was offset by the dollar buying by RBI between 81.75 to 81.95 with importers getting a chance to hedge. Rupee remained in these levels for 20 days before the dollar upmove due to hawkish Fed and good labour data started particularly against Asian currencies. Later as rupee depreciated oil companies, government debt repayment, defence and oil buying took it to 82.76 where RBI sold dollars.”
He added that the current dollar upmove could last for a few more days with RBI protecting the rupee to keeping it stable giving exporters the chance to hedge their receivables before importers get another chance downward to hedge their payables.
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