What RBI Said
The RBI stated that foreign exchange reserves increased by 1.485 billion dollars to reach 599.037 billion dollars in the week ended August 30. During this period, gold reserves increased by 86.2 billion dollars to reach 61.859 billion dollars. The Special Drawing Rights (SDR) increased by 90 million dollars to reach 18.468 billion dollars. Meanwhile, the reserve fund with the International Monetary Fund decreased by 58 million dollars to reach 4.622 billion dollars.
Regarding foreign exchange reserves, India ranks fourth after China, Japan, and Switzerland. India’s foreign exchange reserves have consistently increased over the past few years. A strong foreign exchange reserve provides a sense of security to the country during times of crisis. Additionally, it gives the RBI more options to intervene in the market to control any sharp depreciation of the rupee.