India’s foreign exchange reserves logged their biggest weekly jump since September 2021 and also rose for the first time in three weeks for the week ended October 28, helped by gains in both foreign currency assets and gold reserves. The foreign exchange reserves of Asia’s third largest economy rose by $6.56 billion to $531.08 billion for the week ending Oct 28, according to data released by the Reserve Bank of India.
The foreign currency assets (FCA), a major component of the overall reserves, rose by $5.77 billion to $470.84 billion in the reporting week. Even gold reserves increased by $556 million to $37.76 billion.
Experts said the surge in the reserves during the reporting week was on account of valuation gains arising out of depreciation of the US dollar against major currencies.
The US Dollar Index (DXY) has fallen from around 112 at the beginning of October to around 111 at the end of the month. The index is a measure of the value of the greenback against six major currencies — the Euro, UK Pound, Canadian Dollar, Japanese Yen, Swedish Kroner and Swiss Franc.
The assets held by the central bank (in India, the Reserve Bank of India) in foreign currencies, gold reserves, and SDRs with the IMF are all examples of Indian forex reserves. Apart from foreign banknotes, the forex reserves also contain foreign treasury bills, foreign bank deposits, foreign government securities, and so on.
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