India’s forex reserves close in on $700 billion, extending five-week winning streak

India’s foreign exchange reserves climbed to a record high of $689.46 billion as of September 13, continuing a five-week streak of gains, according to data from the Reserve Bank of India. The reserves rose by $220 million during the latest reporting week, after accumulating a total of $19.1 billion over the previous four weeks.

This steady rise is attributed to the RBI’s intervention in the forex market, along with changes in the value of foreign assets held within the reserves. The central bank actively manages both the spot and forward markets to curb undue volatility in the rupee.

As a result, the rupee strengthened by nearly 0.1% in the week ending September 13, marking its strongest weekly performance since late June.

Also read: RBI’s September bulletin highlights strong domestic growth drivers

India’s foreign exchange reserves also include its reserve tranche position in the International Monetary Fund (IMF), further adding to the country’s financial buffer against global uncertainties.

The RBI’s September bulletin on Friday, also revealed that the central bank bought a net $6.93 billion in the spot forex market in July to stabilise the rupee, which had seen its steepest monthly decline since March.

These interventions highlight the central bank’s proactive measures to manage currency volatility amidst shifting global economic conditions.