India's forex reserves up $6.3 bn to $585 bn, highest in nine months

The surge was mainly on account of a $4.74 billion accretion to currency reserves that took them to $514.4 billion, shows RBI data

India’s foreign currency reserves rose by $6.3 billion to $584.75 billion in the week ended April 7, the highest level during the past nine months or so. The reserves were higher, at $588 billion, in the week ended July 1, 2022.

The surge in reserves in the reporting week was mainly on account of a $4.74 billion accretion to currency reserves that took them to $514.4 billion, shows Reserve Bank of India data.

Gold reserves were valued at $46.69 billion, up by $1.49 billion, RBI data showed. Special Drawing Rights (SDRs) were up by a mere $58 million to $18.45 billion. The reserve position with the International Monetary Fund (IMF) grew by just $13 million to $5.17 billion in the April 7 week.

The country’s foreign exchange reserves were lower by $19.25 billion compared to a level a year ago.

According to RBI’s Monetary Policy report of April 2023, India’s foreign exchange reserves stood at $578.4 billion, equivalent to 9.8 months of projected merchandise imports in 2022-23 or 94.4 per cent of outstanding external debt at end-December 2022.

The appreciation of the dollar, triggered by aggressive rate hikes and the hawkish stance of the US Fed, exerted pressure on emerging market currencies. The Indian rupee touched an all-time low of 83.2 per dollar on October 20, 2022. It recovered in November 2022, riding on a depreciating dollar and net inflows through foreign portfolio investments.