New Delhi: India’s foreign exchange reserves continued their upward trajectory, rising by $3.293 billion to $696.610 billion in the week ended December 26, according to data released by the Reserve Bank of India (RBI) on Friday.
In the previous week, the country’s forex reserves had increased by $4.368 billion, reflecting sustained strength in external buffers.
RBI data showed that foreign currency assets (FCAs), which form the largest component of the reserves, edged up by $184 million to $559.612 billion during the reported week.
Gold reserves recorded a sharp jump of $2.956 billion to $113.320 billion, largely due to a rise in global gold prices. Special Drawing Rights (SDRs) increased by $60 million to $18.803 billion, while India’s reserve position with the International Monetary Fund (IMF) rose by $93 million to $4.875 billion.
Foreign exchange reserves are a critical indicator of a country’s economic resilience and play an important role in ensuring exchange rate stability. The RBI has consistently stated that it closely monitors the forex market and intervenes when required to maintain orderly conditions and curb excessive volatility in the rupee.
The latest increase was also supported by the RBI’s USD/INR buy-sell swap auction of $5 billion conducted on December 16 to infuse liquidity into the banking system. The transaction, which was settled on December 18, contributed to the overall reserve position.
The steady rise in reserves comes amid robust capital inflows, with India witnessing a notable increase in foreign direct investment commitments during the current financial year.
With inputs from IANS