India’s forex reserves touch six-month high at $686 billion as on April 18

India’s foreign exchange reserves rose for seven weeks in a row to reach $686 billion as on April 18, its highest level in six months.In a week ending April 18, FX reserves rose by $8.3 billion, according to data released by the Reserve Bank of India on Friday. With this, nearly $21 billion has been added to the forex kitty in the first three weeks of April.

At current level, FX reserves are shy of around $19 billion from the record high of $704.9 billion reached in September 2024.

Changes to reserves are on the account of the RBI’s intervention in the foreign exchange market and fluctuations in FX assets, which is the biggest chunk of the reserves.

“The boost to FX reserves has been mainly on the back appreciation in the non-dollar assets like Euro and Japanese yen as well as rise in prices of gold in the last one month or so. Additionally, there have also been rising FII inflows in the equity market, which has also led to additions to the reserves,” said Dilip Parmar, foreign exchange research analyst at HDFC Securities.

The RBI data showed that foreign currency assets increased by $3.5 billion to $578 billion. These assets are maintained as a multi-currency portfolio comprising major currencies, such as, US dollar, Euro, Pound sterling, Japanese yen, etc but expressed in dollar terms.Meanwhile, gold reserves, which are also part of the overall FX kitty, rose by $4.6 billion to $84.6 billion. The RBI stated stance has been that it intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate.