India’s foreign exchange reserve reaches new record high of $692.3 billion

Foreign exchange reserves: India's foreign exchange reserves reached a new record high of $692.3 billion for the week ending September 20, according to data released by the Reserve Bank of India ( RBI ). This marks an increase of $2.8 billion compared to the previous week.

The rise continues a positive trend, as reserves had already climbed by $223 million to $689.46 billion for the week ending September 13. The RBI 's Weekly Statistical Supplement indicated that foreign currency assets (FCAs) rose by $2 billion to $605.6 billion. These assets, expressed in dollar terms, account for the value changes in non-US currencies such as the euro, pound, and yen held within the reserves.

Gold reserves also surged, growing by $726 million to $63.6 billion, while Special Drawing Rights (SDRs) increased by $121 million, reaching $18.54 billion. However, India's reserve position in the International Monetary Fund (IMF) declined by $66 million, standing at $4.4 billion.

The RBI intervenes in the foreign exchange market periodically to manage liquidity and curb excessive volatility in the rupee’s exchange rate, selling dollars when necessary to prevent significant depreciation of the currency. The central bank maintains that it does not target any specific level or band for the exchange rate but steps in to ensure stable market conditions.