(MENAFN- IANS) Mumbai, Aug 1 (IANS) India's foreign exchange reserves increased by $2.7 billion to reach $698.19 billion for the week ending July 25, according to data released by the Reserve Bank of India (RBI) on Friday.

The rise was led by higher foreign currency assets, which went up by $1.31 billion to $588.93 billion.

These assets, expressed in dollar terms, include the impact of changes in the value of other major currencies such as the euro, pound, and yen held in the reserves.

Gold reserves also contributed to the growth, increasing by $1.2 billion to $85.7 billion.

The special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $126 million to $18.8 billion, while India's reserve position with the IMF improved by $55 million to $4.75 billion during the week.

The RBI intervenes in the foreign exchange market from time to time to manage liquidity and curb excessive volatility in the rupee's exchange rate.

Such interventions are aimed at maintaining orderly market conditions rather than targeting a specific exchange rate level.

Meanwhile, according to RBI monthly bulletin released late last month, gross foreign direct investment (FDI) into India rose sharply to $8.8 billion in April this year, compared to $5.9 billion in March and $7.2 billion in April 2024.

Nearly half of these FDI inflows came from the manufacturing and business services sectors.

The bulletin also said that India ranked 16th in the world for FDI inflows and attracted $114 billion in greenfield investments in the digital economy between 2020 and 2024 -- the highest among all countries in the Global South.

Foreign portfolio investment (FPI) also saw strong inflows, with net investments of $1.7 billion in May 2025, led by the equity market.

This was the third straight month of gains for equities, supported by positive global and domestic developments such as the India-Pakistan ceasefire, the US-China trade truce, and better-than-expected corporate earnings for the fourth quarter of 2024–25, which boosted investor confidence and led to portfolio shifts towards Indian assets.

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