According to figures provided by the central bank on Friday, India’s foreign exchange (FX) reserves have been steadily increasing over the past six weeks, reaching a new high of $692.3 billion as of September 20. A significant overall gain of $19.3 billion has been recorded over the past five weeks, with an additional $2.84 billion added during the most recent reporting week.
The interventions in the foreign exchange market by the Reserve Bank of India (RBI) to control the rupee’s excessive volatility and the appreciation or depreciation of foreign assets kept in reserves are the main causes of the variations in foreign currency assets. During that time, the U.S. Federal Reserve dropped interest rates by 50 basis points, and local stock and bond markets saw increased inflows, helping the rupee achieve its best week of 2024.
The rupee gained over 0.4% week-on-week last week, hitting a two-month high of 83.4850. The local currency had a small weekly decline of 0.1% as of Friday, settling at 83.70.
