Synopsis
As of January 31, India's forex reserves increased by $1.05 billion to reach $630.607 billion, with gold reserves also rising by $1.242 billion to $70.893 billion. The RBI continues to buy gold as a secure asset amidst global market fluctuations.Key Takeaways
- India's forex reserves grew by $1.05 billion.
- Gold reserves increased by $1.242 billion.
- RBI's strategy includes hedging against inflation.
- Working Group established for market review.
- Global central bank gold purchases total 53 tonnes.
New Delhi, Feb 8 (NationPress) The foreign exchange reserves have increased by $1.05 billion, reaching $630.607 billion for the week ending January 31, as reported by the Reserve Bank of India (RBI) data.
In the prior week, the total reserves had risen by $5.574 billion, amounting to $629.557 billion. The forex reserves peaked at an all-time high of $704.885 billion in September of the previous year.
In addition, gold reserves increased by $1.242 billion, now totaling $70.893 billion during the same week. The Special Drawing Rights (SDRs) rose by $29 million to $17.889 billion, according to the apex bank.
However, the country’s reserve position with the IMF decreased by $14 million, standing at $4.141 billion for the reporting week.
The RBI procured an additional 8 tonnes of gold in November 2024, amidst a global trend of central banks purchasing a total of 53 tonnes of this precious metal, as noted in the latest report from the World Gold Council (WGC).
The RBI, like many other central banks, has been acquiring gold as a secure asset. This strategy is primarily focused on protecting against inflation and mitigating foreign currency risks, particularly during times of uncertainty caused by geopolitical tensions.
Furthermore, the RBI employs forex reserves to manage the volatility of the rupee, which can occur when foreign investment capital exits the market following share sales by international investors.
In other news, the Central Bank has formed a nine-member Working Group to conduct a thorough assessment of trading and settlement timings in financial markets.
Recent developments include increased electronification of trading, access to Forex and specific interest rate derivative markets on a 24X5 basis, a rise in non-resident participation in domestic financial markets, and the availability of payment systems on a 24X7 basis.
The working group includes representatives from various stakeholders and is expected to deliver its findings by April 30 of this year.
