India’s foreign exchange reserves increased to $620.441 billion during the week ending December 29, 2023 – hitting an all-time 21-month high according to data provided by the Reserve Bank of India. Over 2023, they increased by an impressive $58 billion and rose another 4.471 billion last week with its Foreign Currency Assets rising $4.698 billion towards $549.747 billion according to RBI weekly data.
India’s forex reserve fall down to $71 billion in 2022; gold reserves have decreased $102 million during last week and stand at $474.74 billion. Foreign Currency Reserves or FX reserves (acronym used here for ease of reference) are assets held by central banks or financial institutions that represent assets held against currency uncertainty in a nation’s central account or accounts of any type.
Financing their operations usually comes through reserves held in US dollars, euros, Japanese yen and sterling; before last week ended December 15 India had increased their foreign exchange reserves by $9.112 billion to reach $615.971 billion.
In October 2021, China reached an all-time record high foreign exchange reserves totaling some $645 billion before experiencing slight reduction over most of 2021.
A reason for the slight decrease in foreign exchange reserves was RBI’s intermittent interventions into the market in order to protect against depreciation of rupee versus rising dollar, through market interventions by means of intervening or trading at certain moments in response.
The RBI monitors foreign exchange markets closely and intervenes only if excessive fluctuations of exchange rates arise, without changing or altering any predetermined target level or group profile.