India’s FX reserves advance for 6th week to hit record, inch closer to $700bn

MUMBAI: India’s foreign exchange reserves continued to rise for a sixth straight week to a record high of $692.3 billion as of Sept. 20, data from the central bank showed on Friday.

The reserves rose by $2.84 billion in the reporting week, after having risen by a total of $19.3 billion in the prior five weeks.

Changes in foreign currency assets are caused by the Reserve Bank of India’s intervention in the foreign exchange market as well as the appreciation or depreciation of foreign assets held in the reserves.

The RBI intervenes on both sides of the forex market to prevent undue volatility in the rupee.

In the period for which the forex reserves data pertains, the rupee had logged its best week of 2024, aided by a larger-than-usual 50-basis-point rate cut by the U.S. Federal Reserve as well as inflows into local stocks and bonds.

The rupee had jumped to a more-than-two-month-high of 83.4850 last week and gained nearly 0.4% week-on-week.

Forex reserves also include India’s reserve tranche position in the International Monetary Fund.

The domestic currency settled at 83.70 on Friday, and slipped 0.1% week-on-week.