¨
India’s foreign exchange reserves increased by about $3.3 billion the
week ended December 26.
¨ They reached nearly $696.6 billion as of
December 26. This increase continued with the positive trend seen in recent
weeks.
¨ In the previous week, India's forex reserves
had increased by more than $4.3 billion.
¨ Foreign currency assets form the largest part
of the reserves.
¨ These assets rose slightly by around $184 million
to reach roughly $559.6 billion during the week ended December 26.
¨ Gold reserves increased by close to $3
billion and reached about $113.3 billion.
¨ The rise was mainly due to higher
international gold prices.
¨ Special Drawing Rights increased to approximately
$18.8 billion.
¨ India’s reserve position with the IMF rose to
nearly $4.9 billion.
¨ Foreign exchange reserves indicate a
country’s financial strength and help in managing exchange rate stability.
¨ Reserves were supported by a $5 billion
USD/INR swap operation, conducted by the RBI in mid-December.
¨ It was conducted to inject liquidity into the
banking system.
¨ Banks sold dollars to the RBI in exchange for
rupees. They agreed to repurchase the dollars later.
¨
The transaction was settled on December 18. This settlement added to the
overall reserve position.
