MUMBAI: In a week when the rupee plunged to its lowest on record (88.47 on September 11), the forex reserves crossed the $700 billion mark for the third time, adding $4.7 billion to the kitty. The reserves closed the week to September 12 at $702.97 billion — just shy of the record peak.
The rally in the reserves, which are the best defence against the rupee fall and any other external pressure, in a week of extreme rupee volatility and fall shows that the Reserve Bank has not been intervening in the forex market to defend the currency. An analyst told TNIE that this could be an indirect way of the monetary authority helping to whittle down the impact of the 50% tariff that the US had slapped on Indian goods shipped to American shores.
This is the third time that the reserves have crossed the $700 billion-mark. The record was the week to September 27, 2024 when it had hit $704.9 billion and the second time was in the reporting week of June 27 this year when the reserves increased by $4.8 billion to $702.78 billion for the week.
The reserves had since last September been falling till the last week of February this year losing almost $150 billion as the rupee was under tremendous pressure.
In the previous reporting week, the overall reserves had increased $4.038 billion to USD 698.268 billion.
In both the past weeks, the jump in the reserves was led by the rise in the value of gold reserves which jumped by $2.1 billion compared to the previous week at $92.42 billion. Meanwhile, the foreign currency assets rose to $587.04 billion, up $2.5 billion.
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.
The gold reserves increased $2.12 billion to $92.419 billion during the week, the RBI said.
The Special Drawing Rights also rose by $32 million to $18.773 billion, the apex bank said.
The reserve position with the IMF was up by $9 million at $4.76 billion in the reporting week, the apex bank data showed.