India's Forex Reserve Rises To $595.98 Billion

The Reserve Bank of India on Friday released India's foreign exchange reserve number. It has grown to $595.98 billion as on May 5 due to an addition of $7.196 billion.

India's forex reserves reached a 10-month-high of $588.8 billion in the week through April 28, recovering from a drop to $524.5 billion last October, when the rupee hit a record low against the US dollar. Its overall FCA rose by $6.536 billion to $526.021 billion.

RBI also reported a growth of $659 million in the gold reserves to stand at $46.315 billion, while Special Drawing Rights (SDRs) dipped by $19 million to $18.447 billion. India's reserve position in the IMF rose by $20 million to $5.192 billion.

The rupee depreciated by 7 paise to 82.16 against the US dollar and fell for the second straight session on Friday as a strong greenback overseas weighed on investor sentiments. However, a positive trend in domestic equities and unabated foreign fund inflows cushioned the downslide market traders pointed out.

In October 2021, the country's forex reserves touched an all-time high of USD 645 billion. The reserves had been declining as the central bank deployed the kitty to defend the rupee amid pressures caused mainly by global developments.

India's foreign exchange reserves are at a comfortable level currently, benefiting from the Reserve Bank of India's persistent intervention and the likelihood of less volatile revaluation changes, economists said.

Since October 2022, the RBI has been rebuilding the reserves, taking advantage of the rupee's recovery. The central bank bought more than $8 billion in the spot market in November and December, according to its data.

The RBI has been buying dollars in the forward market too. Its net outstanding forward dollar purchases reached $20.4 billion in February, the latest month for which data is available, after having dwindled to $241 million in October.