India's foreign currency reserves rose by $3.66 billion to $641.59 billion as of May 3, bouncing back after a three-week slump.

Summary –

As of May 3, India's foreign exchange reserves jumped by $3.66 billion to $641.59 billion, rebounding from a previous decrease of $2.41 billion. Foreign currency assets (FCAs) also saw a sharp increase of $4.45 billion, reaching $564.16 billion. Gold reserves fell by $653 million to $54.88 billion, whereas Special Drawing Rights (SDRs) grew by $2 million to $18.05 billion. Additionally, India's reserve position in the International Monetary Fund (IMF) dropped by $140 million to $4.499 billion.

According to the Reserve Bank of India's latest data published on Friday, India's foreign exchange reserves increased by $3.66 billion to $641.59 billion as of May 3. This follows a previous contraction of $2.41 billion, bringing the reserves to $637.92 billion on April 26, 2024, marking the third consecutive weekly decline.

As per the RBI's Weekly Statistical Supplement, Foreign Currency Assets (FCAs) experienced a notable increase of $4.45 billion, reaching $564.16 billion. FCAs, when expressed in dollar terms, account for the impact of appreciation or depreciation of non-US units such as the euro, pound, and yen, which are held in the foreign exchange reserves.

Gold reserves decreased by $653 million to $54.88 billion, while Special Drawing Rights (SDRs) increased by $2 million to $18.05 billion. The reserve position in the IMF declined by $140 million to $4.499 billion.

It's worth mentioning that for the week ending on April 5, the nation's foreign exchange reserves had reached an all-time high of $645.6 billion.

The RBI periodically intervenes in the market to manage liquidity, which may involve selling dollars to prevent a significant depreciation of the rupee. It closely observes foreign exchange markets and intervenes to ensure orderly conditions, aiming to curb excessive volatility in exchange rates. These interventions are conducted without adherence to any predetermined target level or range.

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Source - https://economictimes.indiatimes.com/news/economy/indicators/indias-forex-reserves-up-by-3-66-bn-to-641-59-bn-as-of-may-03/articleshow/110011367.cms?utm_source=ETTopNews&utm_medium=HPTN&utm_campaign=AL1&utm_content=23