NEW DELHI: India’s foreign exchange reserves grew for the fifth straight week, reaching an over 20-month high of $615.97 billion as of December 15, according to latest data shared by the Reserve Bank of India.
This surge came as Indian debt and equity markets attracted big money. The forex reserves grew by $9.1 billion in the reported week after a jump of $16.5 billion in the prior four weeks. A jump of $9 billion was the second-highest weekly surge in the ongoing financial year. As per market analysts, main reason for this rise could be fall in the dollar index. Following the outcome of the US Federal Reserve meeting last week, the dollar index registered a fall with the rupee appreciating by 0.4% in the previous week.
“Entire amount should not be physical accumulation, however, looking at the liquidity condition right now, which is tighter than expected, there could be some physical accumulation also,” said Indranil Pan, chief economist at YES Bank.
Forex kitty reached an all-time high of $645 billion in October 2021. Since then, reserves were under pressure as the RBI deployed the kitty to defend the rupee amid pressures caused majorly by global developments.