India's forex reserves reach $616.73 billion with $590 million surge as of Jan 26

India's foreign exchange reserves increased to $616.73 billion, marking a rise of $590 million as of January 26, according to data released by the central bank on Friday. In the previous week, the reserves had experienced a decline of $2.8 billion. The Reserve Bank of India (RBI) actively participates in the foreign exchange market to manage excessive volatility in the rupee.

Fluctuations in foreign currency assets are influenced by the RBI's interventions and the appreciation or depreciation of foreign assets within the reserves. The foreign exchange reserves encompass India's reserve tranche position in the International Monetary Fund.

During the reported week, the rupee traded within a narrow range of 83.0575 to 83.1650, resulting in marginal weekly losses. By the end of the week, the currency settled at 82.9175, showing a 0.2 per cent increase for the week.

As of January 26, 2024, India's foreign exchange reserves exhibit a diversified composition. The reserves consist of foreign currency assets totalling $546,144 million, gold holdings amounting to $47,481 million, Special Drawing Rights (SDRs) valued at $18,248 million, and a Reserve Tranche Position of $4,860 million. Collectively, these components contribute to a total foreign exchange reserve of $616,733 million. This marks a slight increase from the previous week when the reserves were reported at $616,143 million on January 19, 2024.

(With Reuters Inputs)