RBI gets rid of 1.781 Bn USD to stabilize Rupee
The RBI’s management of Forex reserves involves buying and selling of American dollars to maintain stability in the Rupee’s exchange rate.In 2023, India added around USD 58 billion to its Forex reserves.
In 2024, the reserves grew by another $20 billion. So the Reserve Bank of India’s (RBI) intervened to stabilise the Indian Rupee, which has been near its all-time low against the US dollar by getting rid of some of the accumulated American dollars.
Now India’s foreign exchange reserves stand at comfortable $638.698 billion as of the week ending February 28.
This jettisoning of $1.781 billion follows a volatile trajectory where Rupee has fluctuated between gains and losses over recent weeks.
The reserves had peaked at $704.89 billion in September, and therefore a 10% decrease from the peak was certainly required.
The foreign currency assets, the largest component of the reserves, stood at $543.350 billion, while gold reserves were valued at $73.272 billion.
We needed increase the gold reserve further. India’s foreign exchange reserves remain sufficient to cover approximately 10-11 months of projected imports.
