Finance
The Reserve Bank of India’s (RBI) foreign exchange reserves increased by $10.42 billion in the week ended January 13 to a five-month high of $572 billion, according to the most recent data.
In the week ending August 5, 2022, the reserves stood at $572.98 billion.
The increase in the RBI’s reserves is the most significant since the week ending December 2, 2022. Analysts believe the increase in reserves was due to a positive valuation impact in the face of a weaker US dollar, as well as the RBI’s likely purchases of the American currency.
According to the data, the RBI’s foreign currency assets increased by $9.1 billion to $505.52 billion in the week ending January 13.
The US dollar index fell sharply the previous week as data showed slowing inflation in the country, strengthening the case for the Federal Reserve to slow the pace of its monetary tightening. In the previous week, the rupee gained 1.7% against the US dollar, breaking through the 82-per-dollar mark.
Following a $100 billion decline in reserves from February to September 2022, the RBI has been replenishing its foreign exchange reserves over the last few months.
Foreign exchange reserves have increased by $28.9 billion since September 30, and now stand at $561.6 billion as of January 6, covering more than nine months of imports projected for 2022-23, according to RBI staff earlier this week. For the first time since May 2022, the central bank net purchased US dollars in November 2022.
From June to October 2022, the RBI was a net seller of US dollars in the currency market as it sought to reduce excessive volatility in the rupee’s exchange rate amid aggressive Fed rate hikes.
Source:BS
