RBI data shows third consecutive weekly rise in foreign exchange reserves, aided by strategic dollar management and improving global sentiment
New Delhi, March 29: India’s foreign exchange reserves surged by USD 4.53 billion, reaching USD 658.80 billion for the week ending March 21, marking the third straight week of gains, according to data released by the Reserve Bank of India (RBI) on Friday.
This uptick continues a recovery trend after a volatile stretch that saw reserves dip to an 11-month low earlier this year. The latest boost follows the sharpest weekly jump in over three years, recorded in the week ending March 7.
“India’s reserves are rebounding strongly after months of fluctuations. The RBI’s timely interventions and stable macro fundamentals are proving effective,” said a senior economist tracking forex movements.
Reserves had earlier touched an all-time high of USD 704.89 billion in September, before sliding nearly 6.5% amid global headwinds and rupee pressures. The recent slump was widely attributed to RBI’s active dollar selling to curb excessive rupee depreciation, especially as the Indian currency hovered near historic lows against the US dollar.
The latest RBI data breakdown shows:
- Foreign Currency Assets (FCA): USD 558.86 billion
- Gold Reserves: USD 77.28 billion
- Remaining components include SDRs and IMF reserve positions
Experts estimate that India’s forex reserves now provide a 10–11 month buffer for import coverage—an essential macroeconomic shield.
After a drawdown of USD 71 billion in 2022, India added USD 58 billion to its reserves in 2023, signaling a strong comeback. So far in 2024, reserves have risen by over USD 20 billion, reflecting resilient capital flows and the RBI’s calibrated currency management.
What are Forex Reserves?
Forex reserves are external assets held by the central bank in major currencies like the US Dollar, Euro, Yen, and Pound, used to manage exchange rate volatility, ensure liquidity in times of crisis, and maintain investor confidence.
The RBI’s strategy includes buying dollars during periods of rupee strength and selling during weakness to maintain exchange rate stability without compromising growth.