New Delhi: India's foreign exchange reserves witnessed a sharp rise of nearly $10 billion in a single week, moving closer to the record high level recorded earlier this year. According to the latest data released by the Reserve Bank of India (RBI), the country's forex reserves increased by $9.905 billion to $716.907 billion in the week ended August 14.
The rise comes after a significant jump in the previous week as well. For the week ended August 7, India's forex reserves had surged by $14.136 billion to $707.002 billion, reflecting a strong recovery in the country's external financial position.
Forex Reserves Near February Record High
India's foreign exchange reserves had touched an all-time high of $728.494 billion in the week ended February 27. However, reserves declined in the following weeks due to global uncertainty, geopolitical tensions and volatility in currency markets.
The conflict in the Middle East had increased pressure on the Indian rupee, prompting the RBI to intervene in the foreign exchange market through dollar sales.
With the latest increase, India's forex reserves have crossed the $700 billion mark again and are now just around $11.6 billion below the February record level.
Foreign Currency Assets Lead the Increase
Foreign currency assets (FCAs), the largest component of India's forex reserves, contributed significantly to the weekly rise. According to RBI data, FCAs increased by $7.225 billion to $581.851 billion during the reporting week.
Foreign currency assets are valued in US dollar terms and are influenced by fluctuations in major currencies such as the euro, pound and Japanese yen.
Gold Reserves Rise Sharply
India's gold reserves also strengthened during the week.
The value of gold reserves increased by $2.679 billion to $111.417 billion, adding further support to the country's overall forex reserves.
Meanwhile, the Special Drawing Rights (SDRs) component declined slightly by $5 million to $18.74 billion.
India's reserve position with the International Monetary Fund (IMF) increased by $5 million to $4.899 billion.
RBI Measures Support Forex Inflows
The increase in forex reserves comes amid several steps taken by the government and the RBI to boost foreign exchange inflows.
Authorities recently introduced measures aimed at attracting additional foreign currency deposits and strengthening India's external reserves. Under concessional swap measures, India had received around $56.85 billion as of August 13.
These initiatives are aimed at improving foreign exchange availability and providing stability amid global economic uncertainty.