India’s foreign exchange reserves surged by $1.758 billion to hit a new record high of $411.124 billion in the week
to January 5, the Reserve Bank has said.
Foreign exchange reserves had jumped by $4.444 billion In the previous week to reach a fresh peak of $409.366 billion. The reserves had crossed the $400-billion mark for the first time in the week to September 8, 2017 but had since been fluctuating. The spike in reserves was due to a rise in foreign currency assets, a major component of the overall reserves.
The RBI said foreign currency assets rose by $2.045 billion to $387.149 billion. Expressed in the US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of the non-US currencies such as the euro, the pound and the yen held in the reserves. Gold reserves declined marginally by $294.4 million to $20.421 billion, the central bank said.
The RBI had remained net buyer of the US currency in November as it purchased $864 million from the spot market. In the month, the central bank purchased $2.570 billion from the spot market and sold $1.706 billion, according to the latest RBI data. In October, the central bank net bought $852 million of the greenback. In September, it had bought $1.259 billion of the US currency on net basis. The central bank’s intervention in the forex market is to curb volatility in the rupee.
Meanwhile, on Friday, the rupee surrendered most of its early strong gains but eventually managed to end higher by a modest three paise at 63.63 against the US dollar in a highly volatile trade. Fresh bouts of dollar selling by local corporates and exporters along with growing expectations of more foreign fund inflows largely supported the recovery momentum. After plunging to a fresh low of 63.72 in the late afternoon deals, it managed to regain some lost ground and settled marginally higher at 63.63, revealing a gain of 3 paise or 0.05 per cent. For the week, the rupee lost 26 paise against the greenback, snapping a two-straight week rally.