MUMBAI: India’s foreign exchange reserves rose to a record $728.494 billion in the week ended Feb. 27, according to data released by the Reserve Bank of India on Friday. The stockpile increased $4.885 billion from $723.608 billion a week earlier, reversing the prior week’s decline. India’s forex reserves comprise foreign currency assets, gold, Special Drawing Rights and the country’s reserve tranche position at the International Monetary Fund. The figure is widely tracked as a gauge of external liquidity held by the central bank.
Foreign currency assets, the largest component of the reserves, rose $561 million to $573.125 billion in the latest week. Gold reserves increased $4.141 billion to $131.630 billion. Special Drawing Rights were up $26 million at $18.87 billion, while the reserve tranche position at the IMF rose $158 million to $4.87 billion. The new level surpassed the previous peak of $725.727 billion recorded in the week ended Feb. 13, based on RBI data.
The central bank reports the reserves in U.S. dollar terms and also publishes the main components each week. Foreign currency assets include holdings in major currencies such as the U.S. dollar, euro, British pound and Japanese yen. The RBI’s weekly statement notes that the headline total can be affected by changes in the dollar value of non-dollar assets held within the reserves. The data are released as part of the RBI’s regular statistical publication schedule.
Weekly move and composition
In the preceding week ended Feb. 20, the overall reserves fell $2.119 billion to $723.608 billion, according to the RBI’s release. At that time, foreign currency assets stood at $572.564 billion and gold reserves were $127.489 billion. Special Drawing Rights were reported at $18.84 billion and the IMF reserve tranche position was $4.716 billion. The latest week’s rise took gold above $131 billion and lifted foreign currency assets above $573 billion on the RBI’s balance sheet.
The record reading follows other recent highs disclosed by the central bank earlier in the year. In a Feb. 6 monetary policy statement, RBI Governor Sanjay Malhotra said the reserves stood at $723.8 billion as of Jan. 30 and provided merchandise import cover of more than 11 months. RBI data released in late January had shown reserves above $709 billion following a sharp weekly increase. The latest update sets a new benchmark for the RBI’s reported stockpile.
Recent context for India’s forex buffer
Foreign exchange reserves are liquid external assets held by central banks and are used to meet external payment needs and support orderly conditions in currency markets. The RBI has said its approach in the foreign exchange market is aimed at managing volatility, rather than targeting a specific level for the rupee. India’s reserves are disclosed as a consolidated total alongside the component breakdown, allowing markets to track changes in foreign currency assets, gold and the smaller reserve components reported each week.
In the latest week ended Feb. 27, the RBI reported foreign currency assets of $573.125 billion and gold reserves of $131.630 billion, with the remainder in Special Drawing Rights and the IMF reserve tranche position. Together, those figures brought the overall reserves to $728.494 billion, the highest level reported in the weekly data. The central bank releases the updated reserves statement each Friday as part of its weekly statistical publication – By Content Syndication Services.