According to RBI Governor Shaktikanta Das, India’s foreign exchange reserves are at $586.9 billion

Shaktikanta Das, governor of the Reserve Bank of India (RBI), said on Wednesday, October 6, that India’s foreign currency reserves were $586.9 billion for the week ended September 29.

During the monetary policy announcement, Das said, “We remain confident of easily covering our external funding needs. Prior to this, for the week ending September 22, foreign exchange reserves decreased by $2.335 billion to $590.702 billion.

According to the RBI’s Weekly Statistical Supplement published last week, foreign currency assets (FCA) decreased by $2.55 billion to $523.40 billion. The effect of the appreciation or depreciation of currencies other than the US dollar, such as the euro, pound, and yen, held inside the foreign exchange reserves, is included in the Foreign Currency Assets (FCAs), when represented in US dollars.

In October 2021, India’s foreign exchange holdings reached an all-time high of $645 billion. The reserve has, however, been shrinking ever since as the central bank has been using it to protect the rupee against pressures mostly brought on by global events.

To stop a substantial devaluation of the rupee, the RBI regularly uses market interventions for liquidity management, such as selling dollars.

Without following any predetermined objective or range, the RBI actively monitors foreign currency markets and intervenes only to maintain a stable market environment by reducing excessive volatility in exchange rates.

The central bank made the decision to maintain the repo rate, or lending rate, at 6.5% for a fourth straight day on Friday. According to RBI Governor Shaktikanta Das, the decision was made in a unanimous vote at the central bank’s bimonthly Monetary Policy Committee (MPC) meeting.