RBI News: India's foreign exchange reserves strengthen again; coffers cross the $682 billion mark

Indian Foreign Exchange: Amidst the impact of inflation on people's pockets in India, the RBI has shared some good news. According to the Reserve Bank of India (RBI), the country's foreign exchange reserves have strengthened. RBI Governor Sanjay Malhotra provided this update, noting that for the week ending May 28, the country's foreign exchange reserves rose by $938 million to reach $682.32 billion.

Strengthened despite the rupee's decline

He further explained that in the preceding week, the foreign exchange reserves had fallen by $7.51 billion to $681.38 billion. India's foreign exchange reserves had reached a record high of $728.49 billion at the end of February this year. However, the reserves subsequently saw a decline over several weeks due to rising tensions in West Asia and pressure on the rupee against the dollar.

What the latest RBI data indicates

According to the latest RBI data, the primary reason for the increase in foreign exchange reserves was a rise in Foreign Currency Assets (FCA). These assets increased by $3.12 billion to reach $546.15 billion. FCAs constitute the largest component of foreign exchange reserves; apart from the US dollar, they include other foreign currencies such as the euro, pound, and yen. Fluctuations in the value of these currencies also impact the overall foreign exchange reserve figures.

Decline in gold reserves

Meanwhile, the country's gold reserves also saw a decline. During the week under review, they fell by $2.18 billion to $112.6 billion. Additionally, Special Drawing Rights (SDRs) held with the International Monetary Fund (IMF) remained steady at $18.75 billion. Meanwhile, India's reserve position with the IMF rose from $8 million to $4.82 billion.