India’s foreign exchange reserves increased by $5.077 billion to $595.397 billion for the week ended November 17, the latest data released by the RBI showed on Friday.
The forex kitty had fallen by $462 million to $590.32 billion during the preceding week that ended on November 10.
Gold reserves went up by $527 million to $46.04 billion, while SDRs were up by $120 million to $18.13 billion. Reserve position in the IMF expanded by $42 million to $4.83 billion for the week ended November 17.
An increase in foreign exchange reserves is good news, as the RBI uses them to stabilise the rupee when it turns volatile.
The RBI intervenes in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free-fall when it comes under pressure.
Any sharp decline in the country’s forex kitty leaves the RBI less headroom to intervene in the market to stabilise the rupee.