India's Forex Reserves Jump by $6.29 Billion to $696.99 Billion

India's foreign exchange reserves experienced a substantial increase of $6.29 billion, reaching $696.99 billion for the week ending May 8, reflecting a rebound after previous fluctuations and strengthening the nation's economic stability.

India's forex reserves jumped by $6.29 billion to $696.99 billion during the week ended May 8, the Reserve Bank said on Friday.

The overall reserves had dropped by $7.79 billion to $690.69 billion in the previous reporting week.

Understanding the Fluctuations in Forex Reserves

The forex kitty had expanded to an all-time high of $728.49 billion during the week ended February 27 this year, before the onset of the West Asia crisis, which led to several weeks of drop, as the rupee came under pressure and the Reserve Bank of India (RBI) had to intervene in the forex market through dollar sales.

For the week ended May 8, foreign currency assets, a major component of the reserves, increased by $562 million to $552.39 billion, the central bank's data showed.

Components of India's Forex Kitty

Expressed in dollar terms, the foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.

Value of gold reserves jumped by $5.64 billion to $120.85 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) were up by $84 million to $18.87 billion, the apex bank said.

India's reserve position with the IMF was also up by $12 million to $4.875 billion at the end of the reporting week, according to the apex bank's data.