India's foreign exchange reserves rise by $8 billion to six-month high

India’s foreign exchange reserves rose by $8 billion to a six-month high of $686 billion in the week ended April 18 on the back of a rise in gold reserves and foreign currency assets, latest data by the Reserve Bank of India (RBI) showed. Gold reserves increased by $4.5 billion during the week.

 

The reserves had hit a record high of $705 billion in September 2024.

 

Experts said that the total reserves rose on the back of revaluation and dollar buys by the central bank. Gold prices increased by 2.8 per cent during the week.

 

“The revaluation gain was $5.6 billion, and there was a small amount of net purchase of dollars by the RBI,” said Gaura Sen Gupta, chief economist at IDFC First Bank.

 

 

Foreign currency assets increased by $3.5 billion in the previous week. The rupee appreciated by 0.8 per cent during the week.

 

The total reserves have increased by $39 billion in the past six weeks.

 

“The RBI has been buying dollars, and the dollar has been weakening continuously,” said the treasury head at a private bank. “For the most part, it is a revaluation effect,” he added.

 

The dollar index had fallen below the psychologically crucial 100 mark on fears of a recession in the US amid a global trade war. On the other hand, the local currency has been trading with an appreciation bias, with 0.02 per cent gains witnessed against the dollar in April so far.

 

The dollar index measures the strength of the greenback against a basket of six major currencies.

 

The special drawing rights (SDRs) were up $212 million to $18.5 billion. India's reserve position with the International Monetary Fund (IMF) was also up by $7 million to $4.5 billion in the reporting week.