India’s forex reserves jump $9.9 billion to $716.9 billion, hit fresh FY high

India’s foreign exchange reserves jumped $9.905 billion to $716.90 billion during the week ended August 14, according to data released by the Reserve Bank of India (RBI) on Friday. The latest increase comes a week after the country’s forex reserves had surged by $14.1 billion to $707 billion, marking their highest level in the current financial year. The rise in reserves during the latest week was supported by inflows under the RBI’s FCNR(B) deposit scheme, which began to reflect in the country’s foreign exchange reserves. Foreign currency assets (FCA), the largest component of India’s forex reserves, increased by $7.2 billion to $581.85 billion during the week.

The rise in FCAs accounted for the largest share of the overall increase in reserves. India’s gold reserves also recorded a substantial increase, rising by $2.67 billion to $111.41 billion during the week. The strong accretion in foreign exchange reserves strengthens India’s external sector buffers and provides greater resilience against global economic and financial uncertainties. Meanwhile, in the previous week, India's foreign exchange reserves rose sharply by $14.136 billion during the week ended August 7, crossing the $707 billion mark, driven by a significant increase in foreign currency assets and gold reserves.

In rupee terms, the country's reserves expanded by Rs 1.19 lakh crore during the reporting week to Rs 67.32 lakh crore, underscoring the strength of India's external sector position, according to the central bank data last week. The rise was led by an increase in foreign currency assets (FCAs), which constitute the largest share of the country's forex reserves.

FCAs climbed by $9.946 billion to $574.625 billion during the week. Gold reserves also witnessed a substantial increase, rising by $3.995 billion to $108.738 billion. The value of Special Drawing Rights (SDRs) with the International Monetary Fund increased by $79 million to $18.745 billion.

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