The forex reserves continued its upward march and increased by USD 1.267 billion to USD 397.351 billion in the week to January 11, aided by a rise in core currency assets and value of gold, the RBI said Friday. The overall kitty had swelled by USD 2.68 billion to USD 396.084 billion in the previous reporting week. In the reporting week, foreign currency assets — a major component of the overall reserves — rose by USD 1.087 billion to USD 371.379 billion, the Reserve Bank said.
Expressed in US dollars, forex assets include the effect of appreciation/depreciation of non-US currencies such as the euro, pound and the yen held in the reserves. The reserves had touched a record high of USD 426.028 billion in the week to April 13, 2018. Since then, it has been fluctuating and mostly sliding. One of the major reasons for the decline is that the central bank has been selling dollars in the market to contain rupee volatility.
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In the first five months of the current fiscal, the central bank has sold more than USD 34 billion to arrest the fall of the rupee, which had plummeted to 74 level against the greenback earlier this fiscal. The value of the gold reserves increased by USD 154.4 million to USD 21.844 billion in the reporting week, the apex bank said. It can be noted that the RBI has been buying bullion after almost a decade.
During its fiscal year ending June 2018, the RBI had added 8.46 metric tonne gold. The central bank now holds total 566.23 tonne of the yellow metal. The purchase was made to diversify the foreign currency assets, the RBI had said in its annual report. The week saw the special drawing rights with the International Monetary Fund increase by USD 9 million to USD 1.471 billion. The country’s reserve position with the Fund also increased by USD 16.3 million to USD 2.656 billion, the apex bank said.