India’s Forex Reserves Hit $653.97 Billion After Largest Weekly Increase in Two Years
India’s foreign exchange reserves rose by USD 15.267 billion between March 7 and March 13 2024. During the week, foreign reserves expanded to USD 653.966 billion, the biggest increase in more than two years. The Reserve Bank of India (RBI) ‘s nearly USD 10 billion forex swap enhanced market stability and increased market liquidity, leading to the reported rise
After RBI conducted interventions in the foreign exchange market during times of declining foreign exchange reserves, the situation improved with increased reserves. The designed interventions worked to stabilize the rupee exchange value but previously resulted in decreased reserve totals. The most recent spike however signals a positive shift in India’s financial position.
Forex Swap and Its Impact on Reserves
Foreign exchange reserves increased substantially because the RBI performed a USD 10 billion foreign currency exchange swap on February 28, 2024. Through the swap the RBI exchanged Indian currency against U.S. dollars which added liquidity to the financial framework. Through this foreign exchange market stability strategy the RBI intends to reduce rupee pressure and boost domestic market liquidity while providing stability.
India’s foreign currency assets grew substantially to USD 557.282 billion, thanks to the USD 13.993 billion surplus. These assets reflect movements between non-US currencies, including the euro, pound, and yen. The Reserve Bank of India implements this strategy to enhance the rupee exchange value and stabilize the country’s foreign currency markets.
Gold and IMF Reserve Position
Foreign currency assets from India greatly expanded throughout the reporting period. The nation accumulated additional gold worth USD 1.053 billion which expanded the total market value of its gold reserves to USD 74.325 billion. The growth in foreign exchange reserves includes this increase contributing to India’s overall financial stability.
This week, the International Monetary Fund (IMF) reserve position decreased slightly. India’s funds under the IMF reserve position decreased by USD 69 million to USD 4.148 billion. The minimal drop in foreign exchange reserves still positively affects India’s economic stability.
The nation’s reserves have experienced restoring growth after witnessing a previous USD 1.781 billion reduction which decreased the reserves to USD 638.698 billion. India experienced its highest-ever foreign exchange total of USD 704.885 billion in September 2024 demonstrating its shifting economic conditions and marketplace elements.
Additionally India’s economy looks more stable for the future because of the RBI’s forex swap initiative and rising levels of gold along with foreign currency assets. The central bank continues these monetary tactics to stabilize both rupee values and the financial system during world market turbulence.
