India’s foreign exchange reserves rose for a fourth consecutive week and stood at a near-five-month high of $665.4 billion as of March 28, data released by the central bank on Friday showed.
The reserves rose by $6.6 billion in the reporting week, after having increased by a cumulative $20.1 billion in the prior three weeks. Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
In the week to which the reserves data pertains, the rupee gained 0.6% week-on-week, largely on the back of the return of foreign investors to the Indian equity market. The exodus of foreign money from Indian stocks and a spell of dollar strength had kept the rupee under pressure over the last few months, but a recent reversal of those factors has helped the rupee claw back some losses.
The rupee closed at 85.2350 per dollar, ending stronger on the day and up 0.3% on the week, adding to a 2% gain over the last fortnight. Forex reserves include India’s Reserve tranche position at the International Monetary Fund.
