India gains $5,7 billion in foreign exchange reserves.
Mumbai, February 9, (Dailydig News) Friday’s RBI data release, India’s foreign exchange reserves increased by $5.7 billion to $622.5 billion for the week ending February 2.
The total reserves rose to $616.7 billion last week, an increase of $591 million.
Growing foreign exchange reserves support the rupee, which benefits the economy. A rise in foreign exchange reserves supports the macroeconomic foundations and aids in the RBI’s ability to maintain the rupee during periods of volatility.
When the rupee is under pressure, the RBI steps in by releasing more dollars into the spot and forward currency markets to keep it from falling completely.
The RBI has less room to intervene in the market to maintain the rupee as a result of the country’s FX reserves declining precipitously.