About a week ago, Prime Minister Narendra Modi didn’t just ask the public to minimise the use of petrol and diesel, reduce the use of cooking oil, refrain from buying gold and silver, and postpone foreign travel. His real goal was to protect the country’s treasury, which consists of dollars and gold, from depletion. Significantly, the government had already begun filling the country’s treasury, a task clearly evident in the data.
According to data released by the RBI, the country’s forex reserves have increased by more than $6 billion, or over ₹60,000 crore. Significantly, this increase comes after two consecutive weeks of decline. Let us also explain the data released by the RBI.
Significant Increase in Foreign Exchange Reserves
The Reserve Bank of India stated that during the week ended May 8, India’s foreign exchange reserves increased by $6.295 billion, or more than ₹60,000 crore, to $696.988 billion. In the previous week, total reserves had declined by $7.794 billion to $690.693 billion. During the week ended February 27 this year, before the West Asian crisis began, foreign exchange reserves reached an all-time high of $728.494 billion. Subsequently, they declined for several weeks as pressure on the rupee increased, forcing the Reserve Bank of India (RBI) to intervene in the foreign exchange market by selling dollars.
Assets and Gold Reserves Also Increased
According to central bank data, foreign-currency assets—a key component of reserves—increased by $562 million to $552.387 billion in the week ended May 8. These foreign currency assets, expressed in dollar terms, also include the impact of any rise or fall in the value of non-US currencies held in the foreign exchange reserves, such as the euro, pound, and yen.
The RBI said that during the week, the value of gold reserves increased by $5.637 billion to $120.853 billion. The central bank said that Special Drawing Rights (SDRs) also increased by $84 million to $18.873 billion. According to central bank data, India’s reserve position with the IMF also increased by $12 million to $4.875 billion at the end of this week.
