India's forex reserves jump to over two-year high of $636.1 bn

India’s foreign exchange reserves witnessed a significant surge, marking a third consecutive increase in the week ended March 8, 2024. This surge propelled the reserves to reach a two-year high of $636.1 billion, showing the highest weekly increase since July 14, 2023, according to data from the Reserve Bank of India (RBI).

Key Points:

1. Record-Breaking Increase:

Reserves rose by $10.47 billion during the week, the highest weekly increase since July 14, 2023.
The current level of reserves stands close to the all-time high of $645 billion achieved in October 2021.

2. Factors Driving the Increase:

Foreign currency assets surged by $8.12 billion to reach $562.4 billion.
Appreciation in the rupee, along with RBI’s intervention, likely contributed to this increase.
RBI’s active buying of dollars in the spot market absorbed heavy inflows into both debt and equities, as noted by analysts.

3. Growth in Gold Reserves:

Gold reserves saw a notable increase of $2.3 billion, reaching $50.72 billion as of March 18, 2024.

4. Special Drawing Rights (SDRs) and IMF Reserves:

SDRs increased by $31 million to $18.21 billion.
Reserve position in the International Monetary Fund (IMF) rose by $19 million to $4.82 billion.