India’s forex reserves grow for third successive week

India’s foreign currency assets rose by US$ 3.0 billion to US$ 487.28 billion.

India's forex reserves

India’s foreign exchange reserves during the week that ended on November 25 rose by USD 2.89 billion to USD 550.14 billion, the Reserve Bank of India data showed on Friday evening.

This is the third consecutive week of rising reserves. During the week that ended on November 18, the country’s forex reserves were at US$ 547.25 billion, data showed.

According to RBI’s latest data, India’s foreign currency assets, which are the biggest component of the forex reserves, rose by US$ 3.0 billion to US$ 487.28 billion.

However, gold reserves during the week declined by US$ 73 million to US$ 39.93 billion. Barring the past three weeks, the forex reserves have been falling for months now because of RBI’s intervention in the market to defend the depreciating rupee against a surging US dollar.

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Also, rising costs of imported items also necessitated the higher requirement of reserves for trade settlement. Typically, the RBI intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

Overall, India’s forex reserves had declined sharply ever since Russia invaded Ukraine in late February when imports of energy and other commodities got costlier globally.