In the latest Weekly Statistical Supplement released by RBI, the forex reserve has experienced a halt in falling reserve for two weeks. The supplement has two main criteria – RBI’s balance sheet and forex reserves. In October 2021, the country’s forex reserve had reached an all-time high of $645 billion. With the continuous fall in the value of the rupee, the RBI has to use the accumulated reserve to bring stability to the currency. On the other hand, the country is also witnessing the outflow of foreign direct investment(FDI). In the recent supplement, RBI specified reserves have jumped by $4.039 billion to $598.897 billion for the week ended September 1. The gain of $4.039 has been recorded highest in these two months. In the last reporting week, the reserves had dropped by $30 million to $594.858 billion.
Moreover, the foreign reserves are expressed in dollars and thus include the appreciation or depreciation effects of non-US units like the euro, pound, and yen held in the foreign exchange reserve. Other components like Gold reserve were up by $584 million to 44.939 billion. The Special Drawing rights(SDRs) were up by $1 million to $18.195 billion. The central bank intervenes in the foreign exchange market to purchase and sell rupees through the spot and forward market to prevent a sudden drop in the exchange rate value. Adding to the advantage of RBI in bringing stability, the forex reserve also aids in meeting import payments efficiently.