India’s forex reserves hit two-month high of $640.48 bn

India’s foreign exchange reserves rose to a two-month high of $640.48 billion as of February 21, according to data released by the Reserve Bank of India (RBI) on Friday.The reserves increased by $4.76 billion during the reported week, reversing the prior week’s $2.54 billion decline—the steepest drop in a month.Foreign currency assets, a major component of forex reserves, grew by $4.25 billion to $543.84 billion. Fluctuations in these assets are influenced by the central bank’s interventions in the forex market and movements in global asset valuations.The rupee remained volatile, mirroring its Asian counterparts, as uncertainty over U.S. trade tariffs weighed on sentiment. However, periodic interventions by the RBI helped limit sharp losses in the domestic currency.In the week corresponding to the reserves data, the rupee appreciated 0.1% on a weekly basis, aided by a weaker dollar. The currency ended at 87.4950 per US dollar on Friday but recorded a 1% decline in February, briefly hitting an all-time low of 87.95 during the month.India’s forex reserves also include its Reserve Tranche position in the International Monetary Fund (IMF).RBI forex swapThe apex bank on Friday also conducted a $10 billion USD/INR Buy/Sell swap to inject long-term liquidity into the banking system, attracting strong participation.The three-year tenor auction was oversubscribed 1.62 times, reflecting high demand. A total of 244 bids were received, of which 161 were accepted, amounting to $10.06 billion.The settlement for the auction is scheduled for March 4 and March 6.First Published: Feb 28, 2025 5:51 PM IST

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