India's Forex Reserves Witness a Significant Boost

In a remarkable financial update, India's foreign exchange reserves have surged by an impressive $7.654 billion, reaching a total of $638.261 billion as of the week ending February 7. This significant increase marks the third consecutive week of growth, following a previous rise of $1.05 billion, which had set the reserves at $630.607 billion on January 31.

Driving Factors Behind the Surge

This surge comes after a period of decline, primarily influenced by revaluation adjustments and the Reserve Bank of India's (RBI) interventions in the market aimed at stabilizing the rupee. Previously, India's forex reserves had peaked at a record high of $704.885 billion at the end of September 2024.

Components of the Forex Reserves

According to the latest RBI data, the foreign currency assets, which constitute the largest portion of the forex reserves, saw an increase of $6.422 billion, reaching $544.106 billion. These assets, denominated in US dollars, include the valuation impact of other major currencies like the euro, pound, and yen.

Gold reserves also experienced a significant rise, increasing by $1.315 billion to $72.208 billion. However, Special Drawing Rights (SDRs) saw a slight decrease of $11 million, bringing the total to $17.878 billion. Additionally, India's reserve position with the International Monetary Fund (IMF) decreased by $71 million to $4.069 billion over the same period.