India's Forex Reserves See Modest Gain After Previous Week's Sharp Decline
India's foreign exchange reserves registered a modest increase during the latest reporting week. The Reserve Bank of India released data showing the reserves rose by $392 million to reach $687.19 billion for the week ended January 9. This upward movement comes as welcome news following a significant drop in the previous week.
Recovery After Substantial Fall
The recent increase follows a much larger decline in the prior reporting period. During that week, the country's overall reserves had fallen sharply by $9.809 billion to settle at $686.80 billion. The current week's gain represents a partial recovery from that substantial decrease.
Mixed Performance Across Reserve Components
The central bank's detailed breakdown reveals varied performance across different components of the reserves. Foreign currency assets, which form the largest portion of the reserves, actually declined during the reporting week. These assets dropped by $1.124 billion to $550.866 billion.
The RBI provided important context about these foreign currency assets. When expressed in dollar terms, their value includes the impact of appreciation or depreciation of non-US currencies. The central bank holds currencies like the euro, pound sterling, and Japanese yen within these reserves.
Gold Reserves Provide Strong Support
Gold reserves emerged as the strongest performer during the reporting period. They increased substantially by $1.568 billion to reach $112.83 billion. This significant rise in gold holdings provided crucial support to the overall reserve position, helping offset declines in other components.
Other Reserve Components Show Declines
Other elements of the reserves showed decreases during the week under review. Special Drawing Rights with the International Monetary Fund declined by $39 million to $18.739 billion. India's reserve position with the IMF also slipped marginally, falling by $13 million to $4.758 billion.
The Reserve Bank of India regularly publishes this data, providing transparency about the country's foreign exchange position. These reserves serve as an important buffer against external economic shocks and help maintain stability in the currency markets.
