According to the RBI’s updated data, the foreign exchange reserves of the nation increased by US$ 2.68 billion to reach $396.084 billion in the week to January 4. The surge in the forex reserve, which was driven by a rise in core currency assets and gold holdings, is one of the largest increases in recent months.
During the previous reporting week, the overall reserves reported an increase of $116.4 million to $393.404 billion. In the current reporting week, the major component of the overall reserves, foreign currency assets, jumped by $2.215 billion to $370.292 billion.
The reserve which was once recording a high of $426.028 billion in the week to April 13, 2018, has now since fluctuating well below. The decline from the high in the forex reserve is attributed to the selling dollars in the market in order to contain rupee volatility. RBI, in order to stop the free fall of Rupee, has sold more than $34 billion since the first five months of the ongoing fiscal.
The Reserve Bank also announced that the value of gold reserves surged by $465.5 million to $21.689 billion in the reporting week. As per RBI data, 8.46 metric tonnes of gold has been added during the fiscal year ending June 2018. The RBI now holds a total of 566.23 tonnes of gold in order to diversify the foreign currency assets.