India’s foreign exchange reserves rose more than $2 billion in the week ending June 24 after falling for three weeks in a row as the dollar stuttered against most major currencies even as the rupee plunged to new record lows. persisted.
The country’s forex reserves rose $2.735 billion to $593.323 billion during the week ending June 24, from $590.588 billion in the previous week, according to the latest weekly supplement data from the Reserve Bank of India.
While the rupee hit a series of historic lows against the dollar that week, the greenback’s luster was slightly less than that of its major counterparts that week as investors recalibrated inflation and rate hike risks amid weakening demand prospects.
That bolstered the country’s import coverage.
In the week ending June 24, foreign currency assets (FCAs), a significant portion of total reserves, increased $2.334 billion to $529.216 billion, and gold reserves rose $342 million to $40.926 billion, according to the RBI.
FCAs, denominated in dollars, take into account the impact of appreciation or depreciation of non-US currencies held in foreign exchange reserves, such as the euro, sterling and yen.
However, the dollar has regained its supremacy and the rupee’s plunge to its lowest point has continued unabated. So the risks of the country’s import war are still more on the downside.