In the biggest weekly increase in over a year, India's forex reserves swelled by $6.56 billion to reach $531.08 billion for the week ended October 28, RBI data showed on Friday. The overall reserves, which have been on a declining spree for many months now, had dropped by $3.85 billion to $524.52 billion in the previous reporting week. The $6.5 billion jump in the reporting week is the highest since September 2021.
Foreign exchange reserves increased $1.558 billion to $143.148 billion for the week ended March 3
Propelled by foreign investment inflows, India's foreign exchange reserves grew by $26.4 billion for the nine-month period ended December 31, 2003, over a rise of $16.3 billion in the corresponding period of previous fiscal.
India's foreign exchange reserves fell by $1.2 billion during the week-ended September 23, 2005.
Expressing concerns over low returns from over $178 billion forex reserves of India, World Bank has recommended that a part of these funds should be utilised in the high-return infrastructure sector.
Foreign currency assets were down $1.516 billion to $131.426 billion. While gold reserves increased $77 million to $4.453 billion, SDRs were unchanged at $4 million.
Accretion to India's foreign exchange reserves showed a lower growth of $6.6 billion in the first half ended September 2004, against a rise of $16.2 billion in April-September 2003.
The rise in reserves was $2.12 billion.
In the second consecutive week of an increase in the kitty, India's forex reserves have grown by $2.54 billion to $547.25 billion for the week ended November 18, the RBI said on Friday. In the previous reporting week, the overall kitty had swelled by $14.72 billion in the highest weekly rise since August 2021 to $544.71 billion. It can be noted that in October 2021, the country's forex kitty had reached an all-time high of $645 billion.
Finance Minister Nirmala Sitharaman on Tuesday asked fintech firms to focus on risk management at a time when criminals are using AI to mimic voices, clone identities and create lifelike videos to manipulate people.
Surging forex reserves, now over $108 billion, have put 'considerable' pressure on the Reserve Bank of India, which finds the existing money control instruments inadequate to manage the capital inflows, according to PNB Gilts.
The apex bank held 586.44 tonne of gold as on September 30, of which 294.14 tonne are held overseas in safe custody with the Bank of England and the Bank for International Settlements, while the remaining gold is held domestically
India's forex kitty jumped by $10.47 billion to $636.09 billion for the week ended March 8, the Reserve Bank said on Friday. In the previous reporting week, the overall reserves had risen by $6.55 billion to $625.63 billion. In October 2021, the country's forex kitty had reached an all-time high of $645 billion.
Foreign exchange reserves increased $2.146 billion to $139.352 billion for the week ended January 6, according to the weekly supplement released by the Reserve Bank of India.
The Reserve Bank of India's (RBI's) $10 billion US dollar-rupee buy-sell swap auction for three years received bids worth $16.23 billion on Friday, reflecting robust demand amid persistent liquidity deficit in the banking system. This was the second swap auction by the central bank after it infused $5 billion via six month-swap on January 31.
Reserves provide a cushion against shocks.
The central bank may be permitted to lend to the oil companies through authorised dealers in foreign exchange at a cheaper rate of say 4.5-5 per cent. The oil companies can meet their import payment commitments in the foreign currency borrowed from RBI.
China keeps most of its foreign reserves in the United States Government securities.
Lower international interest rates during June-July 2002-03 led to a sharp fall in returns on India's foreign currency assets to 2.8 per cent compared to 4.1 per cent during FY02 while that on gold reserves it fell to 0.6 per cent from 0.9 per cent.
'Investors can consider staying invested in long duration products as there is a possibility of rate cuts in the near term.' Positive macros - lower inflation, high forex reserves and favourable demand-supply dynamics for government bonds - make a strong case for rate cuts from December, says Devang Shah, head of fixed income, Axis Mutual Fund. In an interview with Abhishek Kumar in Mumbai, Shah says this view may not hold true if commodity prices go up sharply.
According to Subbarao, the lower your reserves dip, the more vulnerable you become.
The rupee has depreciated 9.7 per cent against the US dollar over a year and with the RBI stemming the rupee's weakness through dollar sales, its reserves have dropped to their lowest levels since October, 2020. The fall in reserves has widespread implications.
India's foreign exchange reserves increased $2.95 billion to $645.58 billion for the week ended March 29, the Reserve Bank of India (RBI) said on Friday. This is the sixth consecutive week of a jump in overall reserves. The kitty had increased $140 million to $642.63 billion in the previous reporting week.
Dropping for the second straight week, India's foreign exchange reserves plummeted by a hefty $3.20 billion at $284.65 billion on a heavy decline in the currency assets, the Reserve Bank said.
A combination of factors, including heavy investments in US Treasury bonds and dollar sales at a healthy profit, facilitated the Indian central bank in transferring a record surplus of Rs 2.11 trillion to the government for 2023-24 (FY24). The RBI's dollar purchases increased in FY24, supported by robust capital inflows endorsing the economy's health.
During the reporting week, gold reserves increased marginally by $87 million to $26.796 billion.
'Many global investors have been overweight on dollar assets, so some diversification or hedging is naturally expected.'
The recent depreciation of the rupee along with sharp fall in the country's foreign exchange (FX) reserves has sparked a debate whether stability of the exchange rate is necessary and desirable. The rupee was one of the least volatile currencies among peers for almost two years before the current downward pressure started in September after the US Federal Reserve lowered interest rate.
During the week, gold reserves declined by $443 million to $26.910 billion.
All components showed improvement with the exception of FDI and banking capital in the first half of 2010-11.
Trading in the forex market was impacted on Friday as one of the platforms suffered an outage. One of the electronic trading platforms suffered an outage around midday during the trading hours due to which players were unable to log into the system, according to sources. Orders dried up as a result of this, they said, adding that this created a heightened uncertainty in the forex market, causing excess volatility in the Indian rupee, which was avoidable.
'If it doesn't, it will continue with measures to infuse liquidity, signalling a new cycle,' predicts Tamal Bandyopadhyay.
The Reserve Bank of India (RBI) has extended the trading hours for the interbank call money market from July 1, and that of repo and tri-party repo markets from August 1. Market participants said the decision is intended to help reduce the large Standing Deposit Facility (SDF) balances held by banks with the RBI, thereby addressing liquidity mismatches.
The overall reserves had jumped by $7.2 billion to $595.98 billion for the previous reporting week. It can be noted that in October 2021, the country's forex kitty had reached an all-time high of $645 billion.
Foreign exchange reserve, often taken as a yardstick to gauge a country's financial strength, are the foreign currency deposits and bonds held by central banks or monetary authorities (it is Reserve Bank in case of India).
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