(MENAFN- KNN India)
New Delhi, Jan 6 (KNN) India's foreign exchange reserves have continued their downward trajectory, marking the twelfth decline in thirteen weeks, according to the latest data released by the Reserve bank of India (RBI).
The reserves decreased by USD 4.112 billion to reach USD 640.279 billion in the week ending December 27, reflecting the central bank's active involvement in currency market stabilisation.
The recent decline represents a significant shift from September's all-time high of USD 704.89 billion, with reserves falling approximately 10 percent since then.
The RBI's strategic intervention in currency markets, involving both buying and selling of dollars to manage the rupee's volatility, has been identified as the primary factor behind this reduction.
Current figures show that foreign currency assets, the largest component of the reserves, stand at USD 551.921 billion, while gold reserves are valued at USD 66.268 billion.
Despite the recent downturn, India's foreign exchange position remains robust, with current reserves sufficient to cover nearly a year's worth of projected imports.
The country's reserve management has shown mixed patterns over recent years, with an addition of approximately USD 58 billion in 2023, contrasting with a USD 71 billion decline in 2022. The reserves had gained over USD 20 billion in 2024 before the current decline began.
The RBI's approach to foreign exchange management focuses on maintaining market stability rather than targeting specific levels. As the central bank responsible for monitoring foreign exchange markets, the RBI holds assets primarily in reserve currencies, with the US Dollar comprising the majority, followed by smaller holdings in Euro, Japanese Yen, and Pound Sterling.
The transformation of the Indian rupee from being one of Asia's most volatile currencies a decade ago to one of its most stable today highlights the effectiveness of the RBI's management strategy.
This stability has been achieved through calculated interventions, with the central bank purchasing dollars during periods of rupee strength and selling during weakness, ultimately enhancing the attractiveness of Indian assets to international investors.
(KNN Bureau)
MENAFN06012025000155011030ID1109057911
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.