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Forex reserves rose by $3.854 billion to $601.363 billion

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Just a month after slipping below the Reserve Bank’s comfort level, India’s forex reserves again hit the $600 billion mark.

an increase of $3.6 billion in forex asset Assisted in expanding the total stock of reserves billed as a cushion against global economic odds.

foreign exchange reserves for the week ended May 27 were $601.4 billion as against $597.5 billion in the previous week, show data from reserve Bank of India, released Friday evening. The share of reserves held in gold and other International Monetary Fund-backed assets increased by about $244 million.

Bank of Baroda Chief Economist Madan Sabnavis said, “The expansion of forex reserves can happen only because of revaluation as there was no known foreign inflow into the country.”

“In the particular week, the dollar index declined against other major world currencies including the euro and pound,” he said. “This in turn increased the value of those cross currencies on which India holds its fair share of foreign assets.”

The exact share of an asset or other currency asset denominated in dollars reserve Bank of Indiaof forex kit is not known. However, it is estimated that more than a third will be in non-dollar assets.

For the week ended May 27, the dollar index, which measures the unit against a pack of major currencies, fell nearly 1.5% to 101.67.

According to Bloomberg data, the rupee was marginally lower at 77.63 against the dollar on Friday.

India’s central bank will seek to keep its reserves of foreign exchange worth over $600 billion to provide enough cushion through the current commodity super-cycle, record inflation in the West and the Ukraine war, potentially a sell-buy currency. Swap deals are still being used. Suck up excess rupee liquidity, ET reported on May 7.

Forex reserves had also risen in the week ended May 20, leading to a nine-week contraction.

RBI is said to have achieved net purchases on dollar-rupee outstanding forwards, leading to an increase in reserves for the week ended May 20.

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