With a rise of over $11.9 billion, India's foreign exchange reserves have swelled to over $534.5 billion in the week ending July 31, latest data released by the Reserve bank of India (RBI) indicated. The country's kitty had over $522 billion worth of forex in the week-ended July 24.
The reserves had crossed the half-a-trillion dollar mark for the first time in the week-ended June 5, after it had risen by $8.22 billion to $501.70 billion.
Foreign currency assets (FCA), a major component of the overall reserves, have increased by $10.34 billion to $490.8 billion. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves rose $1.5 billion to $37.6 billion in the reporting week. The special drawing rights with the International Monetary Fund (IMF) rose to $1.47 billion and the country's reserve position with the IMF also increased to $4.6 billion.External assets in the form of gold, special drawing rights (SDRs) of the IMF and foreign currency assets (inflows to capital markets, FDI and external commercial borrowings) accumulated by India and controlled by the central bank constitute its forex (foreign exchange) reserves. These serve as a cushion, and help the government manage the country's internal and external financial issues in the event of any economic crisis. The RBI also uses the forex reserves as a monetary policy tool to regulate the rupee.