RBI reserves increased by $10.42 billion

The foreign exchange reserves of the Reserve Bank of India (RBI) increased by $10.42 billion to a five-month high of $572 billion in the week ending January 13, according to latest data.
The reserves were at $572.98 billion in the week ended August 5, 2022.
The increase in reserves at the RBI is the most significant since the week ending December 2, 2022. Analysts claim that the reason for the increase in reserves was a favourable valuation impact due to a declining US dollar as well as potential RBI purchases of US dollars.
For the week ended January 13, the RBI’s foreign currency assets jumped $9.1 billion to $505.52 billion, the data showed.
The Federal Reserve should moderate the pace of its monetary tightening, as seen by the significant decline in the US dollar index last week as statistics revealed falling inflation in the nation. The rupee strengthened past the 82 per dollar level last week after appreciating 1.7% against the US dollar.
“The overall balance of payments has improved and so have valuations. There were likely some dollar purchases by the RBI. That can be seen from the improvement in the liquidity situation in the banking system,” Soumyajit Niyogi, director, India Ratings & Research said.
“Moreover, the fourth quarter is typically favourable for flows, whether through export of software services or for debt-equity flows,” he said.