Foreign exchange reserves rose $6.6 billion to a two-year high of $625.6 billion in the week ended March 1, data from the Reserve Bank of India (RBI) showed. In the previous week, reserves had risen $3 billion to $619.1 billion.
In October 2021, the forex reserves have reached an all-time high of $645 billion. The reserves took a hit as RBI deployed the kitty to rupee amid pressures caused by global developments since last year.
Foreign currency assets rose $6 billion to $554.2 billion in the week ended March 1.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves rose $569 million to $48.4 billion in February. The special drawing rights fell $17 million to $18.2 billion in February. Reserve position in the international monetary fund fell $41 million to $4.8 billion.
“Relentless FPI inflows into debt market and March end Corporate repatriation inflows can drive Rupee higher against the US Dollar. We expect RBI to step in to reduce the pace of appreciation but the direction remains positive for Rupee,” says Anindya Banerjee, head – currency and derivatives research, Kotak Securities.
He added that the rupee is expected to be in the broad range of 82 and 83 in the near-term.