India’s foreign exchange reserves witnessed a significant increase of $2.5 billion in the week ending November 24, as reported by the Reserve Bank of India (RBI). This boost, primarily attributed to foreign portfolio flows into the debt market, reflects a strategic move by the RBI to manage the rupee’s level.
Q: How did the Reserve Bank of India (RBI) contribute to the rise in reserves?
A: The RBI played a key role by strategically absorbing foreign inflows into the debt market, effectively managing the level of the rupee and contributing to the overall increase in foreign exchange reserves.
Q: What additional factor contributed to the uptick in reserves, besides portfolio flows?
A: Gold reserves also witnessed a noteworthy increase, rising by $296 million to reach $46.3 billion. This rise was influenced by a sharp increase in global bullion prices during the reporting week.
Q: How did the RBI’s management strategy impact the Indian rupee?
A: The RBI’s active management and absorption of foreign inflows served as a stabilizing factor for the Indian rupee, despite the currency closing at a record low of 83.40 against the US dollar during the same period.
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