India’s forex reserves rise to record high of $709.41 billion, central bank data shows

MUMBAI: India’s foreign exchange reserves rose to a record high of $709.41 billion as of January 23, compared with $701.36 billion a week earlier, the Reserve Bank of India said on Friday.

Forex reserves have risen sharply over the past two weeks as the central bank conducted forex swaps to infuse rupee liquidity into the domestic markets and the value of its gold holdings rose.

The central bank’s gold holdings are now valued at $123 billion, jumping $5.6 billion over the week.

The central bank has been actively intervening by selling dollars to protect the rupee, which is trading at record lows. The impact of the dollar sales, however, has been offset by the rising value of assets such as gold and due to longer-term forex swaps.

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“Despite the Reserve Bank of India’s interventions to support the rupee, FX reserves have been growing due to the sharp rise in gold prices and the value of non-dollar assets due to appreciation in currencies like the euro and Japanese yen,” said Sakshi Gupta, principal economist at HDFC Bank.

Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves.

Foreign exchange reserves include India’s reserve tranche position in the International Monetary Fund.

FOREIGN EXCHANGE RESERVES (in million U.S. dollars)