Forex Reserve Data: Forex reserves jump by $6 billion to reach $578.78 billion

India Forex Reserve Data:  Foreign Exchange Reserves have seen a surge again. According to the data released by the Reserve Bank of India, on March 24, 2023, the foreign exchange reserves have increased to $ 578.78 billion with a jump of $ 5.98 billion. Earlier in the week, foreign exchange reserves stood at $572.8 billion. 

This big jump in foreign exchange reserves has come due to sharp jump in foreign currency assets of RBI. According to RBI data, there was a jump of $ 4.38 billion in foreign currency assets and it has increased to $ 509.72 billion. India’s gold reserve has increased by $ 1.37 billion to reach $ 45.48 billion. SDR has seen a jump of $18.41 million while India’s reserve in IMF has seen a jump of $5.15 million. 

At the beginning of the year 2022, India’s foreign exchange reserves would have been $ 633 billion, then in October 2021, the country’s foreign exchange reserves had reached an all-time high of US $ 645 billion. The latter is seeing a decline due to the use of currency reserves by the central bank to prevent a sharp fall in the exchange rate of the rupee amid global developments. Today the rupee closed at Rs 82.16 against a dollar. 

The decrease in foreign exchange reserves in the last months is also because imports have become costlier. So due to the strict monetary policy of RBI and Fed Reserve, the rupee has weakened. Investors are taking out their investments from emerging markets and investing in stable countries like America. So that investors can get huge returns even during strict monetary policy. 

RBI intervenes in the market from time to time through liquidity management, in which RBI also sells dollars to avoid further weakening of the domestic currency.

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