India’s foreign exchange reserves increased to $393.132 billion in the week ending 2 November after a jump in foreign currency assets and gold holdings.
The Reserve Bank of India data showed that the forex reserves had risen by $1.054 billion in the reporting week. Foreign currency assets were up by $487.7 million to $368.138 billion and gold reserves rose by $366.5 million to $20.888 billion.
In the previous reporting week, total reserves had dropped by $1.444 billion to $392.078 billion. The value of these are expressed in US dollars and are affected by the appreciation or depreciation of non-U.S. currencies such as the euro, the pound and the yen held in the reserves.
Forex reserves had previously touched a record high of $426.028 billion in the week ending 13 April 2018. Since then, it has been on a decline as the central bank had to sell dollars to stabilize the rupee after the currencies of all major emerging economies, including Turkey’s lira were distressed. It is now down by over $31 billion.
RBI has been ramping up gold reserves in recent years and for the first time in nine years, it added 8.46 metric tonne of gold to the reserves. The last time the central bank had added gold reserves was in Nov. 2009, when it had bought 200 tonnes from the IMF.
The central bank held 566 metric tonnes of gold as of June 2018, up from 558 metric tonnes held in the year-ago period, according to the central bank’s annual report for 2017-18. The increase is due to addition of 8.46 metric tonnes during the year.
Of the 566 metric tonnes of gold reserves, 292 metric tonnes were held as backing for banknotes issued and the balance 274 metric tonnes treated as asset of its banking department.