The bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india (RBI) reports that India's foreign exchange reserves fell for the sixth week in a row, reaching a ten-month low of USD 625.87 billion as of january 10. According to the RBI's most recent report, India's foreign exchange reserves decreased by USD 8.72 billion from USD 634.59 billion. Since hitting a record high of USD 704.89 billion in September, the reserves have been declining.
 
The RBI's efforts to stop the indian rupee's steep depreciation—which just hit an all-time low against the US dollar, exceeding the 86 mark—are mostly to blame for the continuous fall in reserves. To keep the market stable and avoid undue volatility, the central bank has begun becoming involved in the FX market.
 
The foreign currency assets (FCA), which make up the majority of forex reserves, were valued at USD 536.011 billion as of january 10. gold reserves, on the other hand, have increased by USD 792 million to USD 67.883 billion.
 
The RBI has promised that the nation's foreign exchange reserves are enough to pay more than 11 months' worth of imports and almost 96% of the outstanding external debt as of june 2024, notwithstanding the recent decline. The RBI also underlined that sustainable reserve adequacy levels demonstrate how strong India's foreign exchange reserves continue to be.
 
India's foreign exchange reserves increased by about USD 58 billion in 2023 after declining by USD 71 billion in 2022.
 
The RBI's role
 
To maintain stable market conditions and reduce excessive volatility in the rupee exchange rate, the RBI keeps a careful eye on the foreign currency market and only steps in when required. The goal of these interventions is to make indian assets more appealing to investors.
 
The indian rupee has grown to be one of the most stable currencies in Asia over the last ten years. In order to draw international investment to India, the RBI has taken a calculated strategy, purchasing dollars when the rupee appreciates and selling when it depreciates.
 

 
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SIBY JEYYA

19/01/2025 10:44 AM