India's forex reserves rose to an all-time high of $355.947 billion in the week to March 18, up $2.539 billion from the previous week. The previous high was recorded in June 2015 when the reserves had touched $355.459 billion.
With the rupee appreciating by 2.9% in March, the central bank appears to have shored up the country's foreign exchange reserves, currency market experts said.
The rupee had started to rise post the Budget where the key highlight was the government's decision to stick with the fiscal deficit target of 3.5% for fiscal year 2017. Till then the currency had been falling against the dollar with the rupee closing at 68.71 a dollar on February 25, about 12 paise away from its all- time closing low of 68.825.
As on March 18, foreign currency assets (FCA), which forms a key component of the reserves, rose by $2.505 billion from the previous week to $332.504 billion.
FCA are maintained in major currencies like US dollar, euro, pound sterling, Japanese yen, etc. However, the foreign exchange reserves are denominated and expressed in US dollar only.
The movements in the FCA occur mainly on account of purchase and sale of foreign exchange by the RBI in the foreign exchange market in India, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and revaluation of the assets.
Gold reserves rose marginally by $0.6 million to $19.325 billion. Special drawing rights (SDR) from the International Monetary Fund rose by $12.1 million from the previous week to $1.498 billion. SDR is an international reserve asset created by IMF and allocated to its members in proportion of the members' quota at IMF.
The country's reserve position in the IMF stood at $2.618 billion as on March 18, up $21.1 million from the previous week. The rupee had closed at 66.63 to a dollar on Wednesday.