India's forex reserves jump to $531.081 billion in the week ending October 28, 2022, making it the biggest weekly gain in more than a year. All indicators in reserves witnessed an upside in the latest week with foreign currency assets outperforming. Generally, RBI announces its weekly statistical supplement data every Friday.
As per the statistical data, India's forex reserves came in at $531.081 billion in the week ending October 28, 2022, rising by $6,561 billion compared to the previous week. This would be the highest gain since September 2021.
During the week ending October 21, 2022, the reserves were at $524.520 billion. In this week, the reserves dipped by $3,847 billion.
So far, in the current year, reserves have dipped by 16% on the back of RBI's intervention in the currency markets and changes in valuation due to US dollar strengthening to over two decades high.
Further, in the week ending October 28, the foreign currency assets (FCA) which is the major component in forex reserves, recorded an upside of $5,772 billion to $470.847 billion. In the week that ended on October 21, FCA stood at $465.075 billion.
Meanwhile, gold reserves soared by $556 million in the week ending October 28 to $37.762 billion. SDRs stood at $17,625 billion in the week increasing by $185 million. The reserve position in the IMF came in at $4,847 billion up by $48 million compared to the previous week.
On Friday, the Indian rupee appreciated and closed at 82.44 against the US dollar at the interbank forex market. The strengthening in the rupee was driven by a rally in the Chinese yuan due to hopes of relief in U.S.-China tensions and expectations of easing of pandemic curbs by Beijing. On the previous day, the rupee was 82.88 against the US dollar.
The rupee has weakened by more than 10% against the American currency year-to-date --- the biggest losing streak in almost four decades. In October alone, the currency depreciated by 1.55% against the greenback.
Reliance Securities Senior Research Analyst Sriram Iyer said, "Looking ahead, we see the Rupee in a trading band in November. Most of the negative news and hawkish Fed to an extent has been factored in. Additionally, direct aggressive intervention from the RBI can be expected if the Rupee breaks the comfort zone of the central bank. Moreover, the central bank will continue to do buy/sell swaps to stabilize the currency."
"So, for the rest of the month of November, the Rupee could remain within a trading band of 81.25 to 83.25. However, by December end, Rupee’s weakness could remain intact and could test 84.00 levels," Iyer added.
This article taken by livemint.com
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