India’s foreign exchange reserves increased by $14.721 billion to $544.715 billion in the week ended November 11, said Reserve Bank of India data released on Friday.
The increase marks the fastest pace of growth registered in the country’s foreign exchange reserves since August 2021. The sharp rise was mainly due to an increase of $11.8 billion in the central bank’s foreign currency assets to $482.53 billion.
Last week, the rupee strengthened sharply against the dollar, appreciating 2 per cent. The analysts cite this as a reason for the increase in the RBI’s reserves. It was a good opportunity to buy dollars and rebuild reserves.
Separate data released by the RBI on Friday showed that the central bank net sold $10.36 billion dollars in the spot market in September versus sales of $4.25 billion a month ago. In September, surprisingly aggressive guidance on policy tightening by the US Federal Reserve led to huge gains for the dollar. The rupee depreciated 2.3 per cent versus the dollar.
The RBI data showed that the central bank’s outstanding net forward purchases had reduced by $9.7 billion to $10.42 billion. The net forward purchases were at $65.79 billion at the end of the previous financial year.