Mumbai: India's foreign reserves grew to three weeks highest last of week of July thanks to constant foreign currency inflows coupled with a gaining rupee.
As per the Reserve Bank of India's weekly supplementary statistical data, Indian forex reserves grew to $573.875 billion in the week ending July 29 as against $571.560 billion a week ago.
Earlier, the weakening Indian Rupee against the US dollar had forced the RBI to sell dollars in the spot and futures market. The rupee then was at its historic low against the dollar, after gradually succumbing to the hovering international market following the Russian invasion of Ukraine.
Though the rupee met its lowest fall from about 74 per dollar at the start of the year, the RBI's timely interventions are said to have helped the Indian currency from further fall.
The rupee's recent strength has supported the latest reversal in India's import cover. The currency hit a one-month high on Tuesday, trading below 79 per dollar on significant capital inflows in recent days. The greenback stumbled on easing bets of aggressive Federal Reserve monetary action amid recession fears.
The month of July saw foreign institutional investors buying Indian assets for the first time in a year, pawing way for the forex inflows which gave a respite to the ailing rupee.
Between October 2021 and June 2022, foreign institutional investors sold a mammoth ₹ 2.46 lakh crore in the Indian equity markets.
The recent international investors' sentiment in favour of Indian assets could be a reversal of a deep sell-off in Indian equities, and many experts point to that pattern as a turning point for markets.