RBI forex reserves surge by $ 15.26 bn, cross $ 653.97 mark

Mumbai:India’s forex reserves increased to $ 653.97 billion in the week ending March 7, up by $15.26 billion according to the Reserve Bank of

India (RBI) Bulletin weekly statistical supplement released on Friday. This is the highest weekly gain since August 27, 2021, according to

Bloomberg-compiled data. The sharp rise in reserves is due to the valuation gains due to increase in gold prices and the foreign exchange swap done by the RBI on February 28. The central bank on Feb 28 had conducted a US dollar-rupee swap worth $ 10 billion to inject long-term liquidity into the system, with the auction eliciting robust demand. The swap entails the central bank purchasing dollars from banks against the

rupees they hold, while contracting to sell the greenback at a future date.

For the previous week, India's forex reserves fell to $638.69 billion in the week ending February 28, 2025, down by $1.7 billion. According

to the Weekly Statistical Supplement, Foreign currency assets (FCAs) were up by $13.93 billion to $557.28 billion. Expressed in dollar terms, the FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange

reserves. Gold reserves saw a surge of $1 billion to $74.32 billion. Meanwhile, SDRs for the above-mentioned week increased by $212 million

to stand at $18.21 billion. Reserve position in the IMF was up by $69 million to $4.1 billion.

Meanwhile, the Indian Rupee gained to close at 86.9975 during the week as there were flows on two days taking rupee to a high of 86.9325 and

outflows took it lower to 87.3950 where RBI was present selling $. Rupee has been in a range of 86.90 to 87.50 in the past two weeks giving equal opportunities to exporters and importers during the month of March in which the RBI has announced two Open Market Operations (OMOs) and one Dollar Rupee swap of $ 10 billion scheduled for March 24, to provide overall liquidity of Rs 1.9 lakh crore crore to the market as we scramble with the Advance Tax Outflows on March 15.

“The Rupee is expected to remain range bound in the coming week in which we have the FOMC meeting scheduled on March 18 and 19 and the Bank of Japan meeting on the same dates and Bank of England on March 20. Indian trade data will also be out which will give an idea on how exports have performed in February 2025. We shall also know the Real Effective Exchange Rate for rupee for February and RBI dollar

purchases and sales data for January-25 during the next week. The range for the rupee is expected between 86.70 to 87.50 for the week,”

said Anil Kumar Bhansali, head of treasury and executive director Finrex Treasury Advisors.