India’s foreign exchange reserves
The country’s foreign exchange reserves declined by $276 million to $699.96 billion in the week ending October 3. Reserve Bank of India (RBI) told this on Friday. In its last week, the reserves had decreased by $ 2.33 billion to $ 700.24 billion. According to RBI data, in the week of October 3, foreign assets, which form the main part of the reserves, declined by $ 4.05 billion to $ 577.71 billion. These foreign assets include the effect of changes in the value of other currencies like Euro, Pound, Yen.
RBI also said that in this week the gold reserves increased by $ 3.75 billion to $ 98.77 billion. Special Drawing Rights (SDR) increased by $ 25 million to $ 18.81 billion. But, India’s reserves in the International Monetary Fund (IMF) reduced by 4 million dollars to 4.66 billion dollars.
reserve Bank of India
The Reserve Bank of India (RBI) keeps an eye on the foreign exchange market and intervenes when necessary so that stability is maintained in the market. Its objective is to reduce unwanted fluctuations in the exchange rate of the rupee. RBI does not have any fixed exchange rate target or band, rather it only takes steps to run the market smoothly. When there is a lot of movement in the value of rupee, RBI intervenes and controls it so that the economy is not adversely affected. In this way RBI maintains balance in the market.
Rupee showed strength
Despite the decline in foreign exchange reserves, the rupee strengthened by 10 paise to close at 88.69 per dollar on Friday. The rise in domestic stock markets and fall in crude oil prices supported the rupee. Forex traders say that RBI intervention also supported the rupee. However, the strength of the US dollar restrained the rise of the rupee to some extent. Today the rupee has been trading between 88.50 and 88.80 throughout the day.