Reserve Bank of India Governor Shaktikanta Das revealed that India’s foreign exchange reserves reached $622.5 billion for the week ending on February 2, marking a slight increase from the previous week’s figure of $616.73 billion, as reported by the RBI. Notably, in October 2021, the country’s forex reserves had surged to an all-time high of $645 billion. However, these reserves have been gradually decreasing as the central bank utilizes them to support the rupee against external pressures, primarily stemming from global developments.
The RBI routinely intervenes in the foreign exchange market, employing strategies such as liquidity management and selling dollars, to prevent sharp depreciations in the value of the rupee. The central bank’s interventions are aimed at maintaining orderly market conditions and curbing excessive volatility in the exchange rate. It’s important to note that these interventions are conducted without a fixed target level or range for the exchange rate, with the RBI closely monitoring market dynamics to ensure stability.
