India’s Forex Reserves Rise After Weeks Of Decline
After multiple weeks of decline, India’s foreign exchange kitty swelled to $393.132 billion in the week to Nov. 2, driven by a jump in foreign currency assets and gold holdings.
Forex reserves rose by $1.054 billion during the reporting week that ended Nov. 2, data by the Reserve Bank of India showed. Foreign currency assets rose $487.7 million to $368.138 billion. Gold reserves rose by $366.5 million to $20.888 billion.
Total reserves had dropped by $1.444 billion to $392.078 billion for the previous reporting week.
Expressed in U.S. dollars, foreign currency assets include the effect of appreciation or depreciation of non-U.S. currencies such as the euro, the pound and the yen held in the reserves.
Forex reserves had touched a record high of $426.028 billion in the week to April 13, 2018. Since then, it has been on a slide and is now down by over $31 billion as the monetary authority has been selling dollars to contain rupee volatility.
The country’s reserve position with the International Monetary Fund rose $192.2 million to $2.639 billion, the apex bank said. However, the special drawing rights with the Fund slipped $200,000 to $1.465 billion.
RBI has been ramping up gold reserves in recent years and for the first time in nine years, it added 8.46 metric tonne of gold to the reserves. The last time the central bank had added gold reserves was in Nov. 2009, when it had bought 200 tonnes from the IMF.
The central bank held 566 metric tonnes of gold as of June 2018, up from 558 metric tonnes held in the year-ago period, according to the central bank’s annual report for 2017-18. The increase is due to addition of 8.46 metric tonnes during the year.
Of the 566 metric tonnes of gold reserves, 292 metric tonnes were held as backing for banknotes issued and the balance 274 metric tonnes treated as asset of its banking department.