MUMBAI: The record rally in gold prices, which scaled past $4300/ounce mark in the reporting week, have lifted the overall forex reserves by $4.5 billion to sniff at the record it had scaled last September when it was near $705 billion mark. The reserves closed the reporting week of October 17 at $702.28 billion.
This is significant as the Reserve Bank has regularly been in the market as the rupee was bleeding and hit a nadir of 88.80.The biggest push for the accretion was the significant $6.181-billion jump in the value of the gold reserves which top 880 tonne by September.
This has taken the overall value of the yellow metal reserves to $108.546 billion during the week. As a result the overall reserves rose by $4.496 billion to $702.28 billion, just shy of the record $704.8 billion reported in the week to September 27, 2024. The reserves had scaled past the $700-billion twice in the past month but failed to breach the record, according to the weekly data released by the Reserve Bank Friday.
In the previous week, the overall reserves had increased by $2.176 billion to $697.784 billion. However, for the reporting, the foreign currency assets, the largest part of the reserves, fell by $1.692 billion to $570.411 billion, primarily due to the steep cuts the rupee had to take and also other major currencies fell against a rising dollar. These assets are affected by changes in the value of currencies such as the euro, pound, and yen.
The special drawing rights (SDRs), another component of the overall reserves, also saw a slight increase of $38 million, reaching $18.722 billion, the central bank said. The country’s reserve position with the International Monetary Fund also fell by $30 million to $4.602 billion in the reporting week. However, the massive growth in gold reserves helped offset the dip in foreign currency assets, keeping the overall reserves at a strong level of over $700 billion, and near the record high.
