Forex reserves dip from one-month high, stand at $617.23 billion

India's foreign exchange reserves witnessed a decline, snapping a two-week gaining streak, and stood at $617.23 billion as of February 9, according to data released by the Reserve Bank of India (RBI) on Friday. The decrease comes after the reserves had reached a one-month high, signalling fluctuations in the country's forex holdings.

During the week, the reserves witnessed a decline of $5.27 billion, marking the steepest fall in a month, following a cumulative increase of $6.36 billion in the preceding two weeks. The RBI's intervention in the forex market aims to manage excessive volatility in the Indian rupee, contributing to fluctuations in the forex reserves.

The composition of foreign exchange reserves is influenced by the RBI's interventions and fluctuations in the valuation of foreign assets held within the reserves. Additionally, India's reserves encompass its reserve tranche position in the International Monetary Fund, contributing to the overall reserve holdings.

Throughout the week under review, the rupee exhibited a slight depreciation of 0.1 per cent against the US dollar, trading within a range of 82.8875 to 83.0700. The domestic currency concluded the week marginally unchanged, settling at 83.0150 on Friday.

The fluctuation in forex reserves and currency valuation underscores the dynamic nature of India's external financial position, influenced by various domestic and global factors. As the RBI continues to manage currency fluctuations and ensure stability in the forex market, stakeholders closely monitor developments in India's forex reserves and exchange rate movements.