India's foreign exchange reserves increased to $716.9 billion in the week ended August 14, the highest level in six months, the Reserve Bank of India reported on Friday.
The reserves rose by nearly $10 billion from the prior week, with foreign currency assets contributing $7.2 billion and gold holdings adding $2.7 billion. The increase marks the seventh consecutive week of growth, bringing total accumulation over that period to about $50 billion.
The current level approaches the record high of $728.5 billion reached in February. The RBI's recent policy measures, announced in June, have supported the inflow of dollars to strengthen India's balance of payments. These measures included discounted hedging facilities for overseas borrowings by state-run companies and banks, as well as a free-of-cost hedging facility for banks raising overseas foreign exchange deposits.
The central bank has absorbed these inflows through discounted foreign exchange swaps. As of August 13, inflows received under these measures totaled nearly $57 billion, with over $50 billion originating from foreign exchange deposits. Due to the volume of inflows, the RBI advanced the closure date of its deposit hedging facility by one month to August 31.
