India's forex reserves reach record high of USD 692.3 billion

India's foreign exchange reserves have surged for the sixth consecutive week, hitting a record high of $692.3 billion as of September 20, according to data released by the central bank on Friday. 

In the latest reporting week, the reserves increased by $2.84 billion, building on a total rise of $19.3 billion over the preceding five weeks. The fluctuations in foreign currency assets are largely influenced by the Reserve Bank of India's (RBI) interventions in the foreign exchange market, alongside the appreciation or depreciation of foreign assets within the reserves.

The RBI actively engages in both buying and selling foreign currency to mitigate undue volatility in the Indian rupee. During the period covered by the latest data, the rupee recorded its strongest performance of 2024, buoyed by a significant 50-basis-point rate cut from the U.S. Federal Reserve, as well as robust inflows into domestic stocks and bonds.

Last week, the rupee climbed to a more than two-month high of 83.4850, marking a week-on-week gain of nearly 0.4%. However, by Friday, the domestic currency settled at 83.70, experiencing a slight dip of 0.1% compared to the previous week.

Additionally, India's forex reserves include the country's reserve tranche position in the International Monetary Fund (IMF), contributing to the overall financial stability and resilience of the economy. (With inputs from Agencies)