MUMBAI: Foreign exchange reserves zoomed past their previous week’s record to touch a new high of $375.7 billion on May 5, data released by the Central Bank showed. On April 28, the reserves were at $372.7 billion, the highest since September 9, 2016.
Dollar purchases by the Reserve Bank of India to ease volatility in the rupee exchange rate and increase in valuation of its assets has led to the jump in the forex reserves, traders said. The rupee has gained 5.3% against the dollar since the beginning of 2017. On April 26, it appreciated to 63.93 to a dollar, its highest level since August 10, 2015.
Foreign currency assets (FCAs), the largest component of the foreign exchange reserves, grew to $351.5 billion from $349.1 billion in the previous week, RBI data showed. Expressed in US dollar terms, FCAs include the effects of appreciation/depreciation of non-US currencies, such as the euro, pound and yen, held in the reserves.