India’s foreign exchange reserves increased by $1.153 billion to $585.895 billion during the week ended October 13, according to the RBI data. This is the first increase in forex reserves in several weeks.
The increase in forex reserves is attributed to a rise in gold reserves, which were up by $1.268 billion to $43.575 billion during the week. Special Drawing Rights (SDRs) also increased by $72 million to $17.995 billion.
Foreign currency assets, a major component of the reserves, decreased by $178 million to $519.351 billion during the week. Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
India’s reserve position with the IMF was down by $8 million to $4.975 billion in the reporting week.
The increase in forex reserves is a positive development for the Indian economy. It shows that the country has enough foreign exchange reserves to meet its external obligations and to withstand any shocks in the global financial markets.