India's forex reserves rise to a 9-month high of $586 billion

India's foreign reserves have been on an upward trend for the past four weeks, reaching their highest levels since July 2022.

According to the Weekly Statistical Supplement released by the Reserve Bank of India (RBI) on Friday, the total reserves for the week ending April 15 increased by $1.65 billion to $586.41 billion, with an overall increase of $25.47 billion in the last four weeks.

While this is good news for India's economy, the current reserves are still $60 billion away from the all-time high of $645 billion achieved in October 2021. However, the increase in foreign currency assets, a significant component of the reserves, is particularly noteworthy.

For the week ended April 14, foreign currency assets rose by $2.20 billion to $516.63 billion. The foreign currency assets are calculated in dollar terms and take into account the appreciation or depreciation of non-US currencies such as the euro, pound, and yen held in foreign exchange reserves. It is important to note that in the last financial year of 2022-23, Forex reserves fell by $18 billion and Forex assets by more than $20 billion.

While foreign currency assets have been rising, gold reserves have seen a decline of $525 million to $46.2 billion due to rising prices. On the MCX, gold prices are currently trading above Rs 60,000, and international prices are above $2,000/ounce. Similarly, the Special Drawing Rights (SDRs) have also fallen by $38 million to $184 billion.

Despite these fluctuations, the Indian rupee has seen a minor appreciation against the dollar to the level of $81.85, the highest it has been in more than two months.