MUMBAI: After falling for months together, the foreign exchange reserves have climbed back to a two-month high, adding $4.76 billion to $640.47 billion as of February 21, according to weekly data released by the Reserve Bank of India (RBI) on Friday.
The accretion was primarily due to the valuation gains of other key major currencies which were falling against the rupee. Since the last week of September (027) last year when it peaked at close $705 billion, the forex reserves have been falling as RBI has been selling dollars to prop the rupee which between the first week of October and till February 28, has lost close to 4% after touching 87.95 on February 10—its lowest on record.
RBI has sold nearly $90 billion in the past five months alone. Meanwhile, the rupee lost 28 paise to close at 87.495 against the dollar which gained after Donald Trump said higher imports tariffs against China, Mexico and Canada will be effective from March 2. This had the domestic equites markets plunging by 1.9%.
The rupee lost 1% in February, and had slipped to an all-time low of 87.95 during the month. This growth was mainly driven by foreign currency assets that increased to $543.84 billion, up by $4.2 billion, the RBI said Friday. Gold reserves, however, showed no significant growth since last week at $74.57 billion.