MUMBAI: India’s foreign exchange reserves rose by $305 million to reach $654.271 billion in the week ended March 14, according to data released by the Reserve Bank of India (RBI) on Friday.
The increase follows a sharp $15.267 billion surge in the previous week, marking the biggest weekly rise in two years.
The recent spike in reserves was partly driven by the RBI’s $10 billion forex swap, which helped bolster dollar liquidity in the banking system.
A forex swap involves the central bank purchasing dollars from banks with an agreement to sell them back at a future date, ensuring liquidity management while stabilising currency fluctuations.
Despite the uptick, reserves have been under pressure in recent weeks due to valuation adjustments and the RBI’s market interventions to curb volatility in the rupee.
India’s forex reserves had previously touched an all-time high of $704.885 billion in September 2024.
For the week ended March 14, foreign currency assets – the largest component of reserves – declined by $96 million to $557.186 billion. These assets, expressed in dollar terms, account for movements in other major global currencies such as the euro, pound, and yen.
Gold reserves, however, increased by $66 million to $74.391 billion. The Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) rose by $51 million to $18.262 billion, while India’s reserve position with the IMF saw a notable jump of $283 million to $4.431 billion.
The RBI’s forex management strategy, including swaps and interventions, remains a key tool in ensuring exchange rate stability amid global currency fluctuations.
