India, forex reserves, Reserve Bank of India, economy, foreign currency assets, gold reserves, Special Drawing Rights, International Monetary Fund, rupee, market stability
India's foreign exchange reserves saw a healthy boost, climbing by USD3.66 billion to hit USD641.59 billion by May 3, rebounding from a recent slump. The Reserve Bank of India's latest data, released on Friday, revealed this positive trend.

Earlier, there had been a decline in forex reserves by USD2.41 billion to USD637.92 billion, marking the third consecutive week of contraction by April 26, 2024. However, the scenario changed with the recent uptick.

Foreign currency assets (FCAs) played a significant role in this increase, surging by USD4.45 billion to USD564.16 billion. FCAs encompass various foreign currencies, factoring in their fluctuating values against the US dollar, including the likes of the euro, pound, and yen.

Gold reserves experienced a slight dip, decreasing by USD653 million to USD54.88 billion. Conversely, Special Drawing Rights (SDRs) saw a modest rise, increasing by USD2 million to USD18.05 billion. Meanwhile, the reserve position in the International Monetary Fund (IMF) declined by USD140 million to USD4.499 billion.

It's worth mentioning that on April 5, the country's forex reserves had reached an all-time high of USD645.6 billion, indicating fluctuations in this economic indicator.

The Reserve Bank of India (RBI) keeps a close eye on foreign exchange markets, stepping in when necessary to maintain stability. This includes actions like selling dollars to prevent sharp declines in the value of the rupee. The RBI's interventions are aimed at ensuring orderly market conditions and curbing excessive volatility in exchange rates, without adhering to specific target levels or bands.

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