India's forex reserves rise to $595.97 billion as RBI stocks up on gold

India may be a bright spot in the gloomy global economy, but gold shines brighter when uncertainty looms and countries look for safe bets. Like many other central banks, the Reserve Bank of India also added the yellow metal's glitter to its foreign exchange reserves, to find a way through an impending recession.

This has triggered a rise in India's forex reserves, made up of foreign currency and precious metals, for the week that ended on May 5, 2023.

Defying pressure

Despite the US dollar's increasing strength causing pressure for the Indian Rupee, the RBI managed to bulk up its foreign exchange pile.

Central banks usually sell foreign currencies such as the US dollar, in order to break the fall of their legal tender.

The current uptick in foreign exchange reserves to $595.97 billion, follows a drop in the week before to $588.78 billion.

Hit by global uncertainties

With the fluctuations, India's forex reserves still remain far below the highest ever mark of $645 billion that it had breached back in October 2021.

The data comes in at a time when inflation in the country has dropped to the lowest levels since October 2021.

Despite the addition of 34.22 tonnes of gold in FY23, foreign currency worth $526 billion, make up a bulk of the total forex reserves.