Forex Update: India's Foreign Exchange Reserves Jump $4 Billion To $599 Billion

India’s foreign exchange (forex) reserves jumped $4.039 billion to $598.897 billion for the week ended September 1, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped by $30 million to $594.858 billion.

In October 2021, the country’s forex kitty had reached an all-time high of $645 billion. The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global developments since last year.

For the week ended September 1, the foreign currency assets, a major component of the reserves, increased by $3.442 billion to $530.691 billion, according to the Weekly Statistical Supplement released by the RBI.

Expressed in dollar terms, the 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.

Gold reserves were up by $584 million to $44.939 billion, the RBI said. The special drawing rights (SDRs) were up by $1 million to $18.195 billion, the apex bank added.

The country’s reserve position with the IMF was also up by $12 million to $5.073 billion in the reporting week, the RBI data showed.

The Rupee Vs Dollar During Week Ended September 8

During the week ended September 8, the dollar was stronger against most currencies during the week as such the rupee opening was under pressure during the entire week except today when the RBI forcefully sold dollars and brought it down to below 83 to close at 82.95.

Asian currencies continued to remain weak against the dollar with CNH falling to below 7.35 which is a nine year low. Oil rose to above $ 90 pursuing oil companies to keep buying dollars and thus putting constant pressure on the rupee. FPIs have sold equities worth Rs 9,000 crore and have added to the pressure on buying of dollars. In the meanwhile, RBI decided to discontinue the incremental CRR fully from October 7 removing it partly.

Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP, said, “In the coming week, we expect the rupee to broadly continue in the range of 82.50 to 83.50 and within a narrow band of 82.70 to 82.30 with a close watch on RBI who has been advocating rupee to be neither too strong nor too weak to ensure inflows into equity debt and FDI continue. In the current week we shall be having the ECB on 14th while other major central bank meetings will be in the week after that.”

(With Inputs From PTI)