Forex reserves hit six-month high of $686 billion

India's foreign exchange reserves rose for the seventh week in a row to reach $686 billion as of April 18, the highest in six months.

During the week ending April 18, forex reserves rose by $8.3 billion, according to data released by the Reserve Bank of India on Friday. With this, nearly $21 billion has been added to the forex kitty in the first three weeks of April.

At the current level, forex reserves are shy of around $19 billion from the record high of $704.9 billion reached in September 2024.

Changes to reserves are on account of RBI's interventions in the foreign exchange market and fluctuations in forex assets, which is the biggest chunk of the reserves.

"The boost to forex reserves has been mainly on the back appreciation in the non-dollar assets like Euro and Japanese yen as well as rise in prices of gold in the last month or so. Additionally, there have also been rising foreign investor inflows in the equity market, which has also led to additions to the reserves," said Dilip Parmar, foreign exchange analyst at HDFC Securities.

The RBI data showed that foreign currency assets increased by $3.5 billion to $578 billion. These assets are maintained as a multi-currency portfolio comprising major currencies, such as the US dollar, Euro, Pound sterling, Japanese yen, etc but expressed in dollar terms.