India’s foreign exchange reserves rose by $2.563 billion during the week ended 18 December to reach a record high of over $581 billion, Reserve Bank of India (RBI) data showed.
Reason
The increase in reserves was due to a rise in foreign currency assets (FCAs), a major component of the overall reserves.
Forex Components
India’s forex reserves comprise of the following:
- Foreign currency assets (FCAs),
- Gold reserves,
- Special drawing rights (SDRs),
- Country’s reserve position with the International Monetary Fund (IMF)
Foreign Currency Assets
The Foreign Currency Assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
On a weekly basis, FCAs, the largest component of the forex reserves, edged higher by $1.382 billion to $537.727 billion.
Gold Reserves
The gold reserves increased by $1.008 billion in the reporting week to $37.020 billion in the week ended December 18.
Special Drawing Rights
The special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $12 million to $1.515 billion.
IMF Reserves
In addition, the country’s reserve position with the IMF increased by $160 million to $4.870 billion.
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