Forex reserves likely to show revaluation gains now, say analysts

RBI said to have been actively buying dollars for the past couple of weeks, say currency traders

The Reserve Bank of India’s steps to ensure stability in the exchange rate amid considerable global headwinds may have led to a steep decline in foreign exchange reserves in 2022, but analysts believe that there are factors that could now lead to an improvement on the reserves front.

Key among the factors is a recent reversal in the valuation of RBI’s reserves, as signs of easing inflation in the US have led to hopes of the Federal Reserve slowing down the pace of its monetary tightening.

“We estimate that out of the more than $93 billion fall in foreign reserves