India's forex reserves rise USD 7.2 bln to USD 596 bln

India's foreign exchange reserves rose by USD 7.196 billion to USD 595.976 billion in the week that ended on May 5, data released by the Reserve Bank of India showed on Friday. Prior to the May 5 ended week, the reserve rose by USD 4.532 billion to USD 588.780 billion.

Coming back to RBI's latest data, India's foreign currency assets, the biggest component of the forex reserves, rose by USD 6.536 billion to USD 526,021 billion. Gold reserves during the latest week rose by USD 659 million to USD 46.315 billion.

In October 2021, the country's foreign exchange reserves touched an all-time high of about USD 645 billion. Much of the decline can be attributed to a rise in the cost of imported goods in 2022.

Also, the forex reserves had fallen largely because of the RBI's intervention in the market to defend the depreciating rupee against a surging US dollar. Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.