India’s Forex Reserves Soar to Record High, Hits $648.70 Billion

India’s foreign exchange reserves have surged for the third consecutive week, reaching an unprecedented high of $648.70 billion as of May 17, according to data released by the central bank on Friday.

In the span of one week, the reserves experienced a substantial increase of $4.55 billion, marking the most significant jump in two months. Over the past two weeks combined, they grew by a total of $6.23 billion.

The Reserve Bank of India (RBI) actively intervenes in the foreign exchange market to stabilize the rupee and prevent excessive volatility.

Fluctuations in foreign currency assets result from the RBI’s interventions and changes in the value of foreign assets held in the reserves. Sources indicate that the RBI is adjusting its approach to managing rupee volatility, with non-deliverable forwards now playing a more prominent role compared to spot market interventions.

India’s foreign exchange reserves also encompass its reserve tranche position in the International Monetary Fund.

During the reported week, the rupee traded within a narrow range of 83.3250 to 83.5300 against the dollar, recording weekly gains of approximately 0.2%. By the end of the week, the currency settled at 83.0975 against the U.S. dollar, achieving its most significant weekly gain in over five months.