India currency reserves (Forex) increased USD 1,567 billion to USD 677,835 billion in the week ending on April 4, extending profits for the sixth consecutive week, they showed the official data published by the Bank of the Reserve of India (RBI). According to the data published by RBI, for the week that ended on April 11, foreign currency assets increased by USD 892 million to USD 574.98 billion. Foreign currency assets are the main constitue of Forex reserves.
The Gold Reserve also saw a Upick, as it increased the USD 638 million to USD 79,997 billion during the week, suggests RBI data.
However, the Special Drawing Rights (SDR) saw a decrease in USD 6 million to USD 18,356 billion, according to the data.
The compliance with the RBI estimates that India’s foreign exchange reserves are sufficient to cover approximately 10-11 months of projected imports.
The Indian currency market (Forex) has seen strong growth in recent years, with an average daily turnover that almost doubles USD 32 billion in 2020 to USD 60 billion in 2024.
In 2023, India added around USD 58 billion to its foreign exchange reserves, in contrast to an accumulated decrease or USD 71 billion in 2022. In 2024, reserves increased a little more than USD 20 billion. Currency reserves, or FX reserves are active in the possession of a central bank of nations or monetary authority, mainly in reserve currencies such as the US dollar, with smaller portions in the euro, the Japanese yen and the sterling pound.
The intervention RBI when managing liquuidity, including the sale of dollars, to avoid the strong depreciation of the rupee. The RBI strategically buys dollars when the rupee is strong and sells when weakens.