Forex Reserves Rise To $702.97 Billion

India's foreign exchange reserves rose to $702.97 billion for the week ended Sept. 12, according to data from the Reserve Bank of India on Friday.

The country's forex kitty rose by $4.7 billion over the previous reporting week. In the previous reporting week, the reserves had risen to $698.27 billion.

The Indian rupee had risen to its highest level against the greenback in over two weeks on Wednesday before the US Federal Reserve policy meet outcome. The Indian unit settled above the psychologically crucial mark of 87 for the first time since Aug. 28.

For the week ended Sept. 12, foreign currency assets — a major component of the reserves — advanced $2.52 billion to $587 billion, according to the RBI data. In dollar terms, foreign currency assets include the effect of the appreciation or depreciation of non-US units like the euro, pound and yen held in foreign exchange reserves.

Gold reserves increased by $2.1 billion to $92.4 billion during the week.

India ranks as the fourth-largest holder of foreign exchange reserves, sufficient to cover nearly a year of imports. The country's forex holdings are the fourth largest, after China, Japan and Switzerland.

RBI Governor Sanjay Malhotra on Thursday at the 35th Conference of State Finance Secretaries emphasised on the importance of fiscal discipline for promoting economic growth and prosperity.

The governor also stressed the need for the states to focus on improving the quality of expenditure and ensuring prudence in off-budget borrowings.

Malhotra also underscored the importance of active coordination between the states and the Reserve Bank for effective implementation of various initiatives being undertaken in the areas of currency management, financial inclusion, and Unified Lending Interface, it added.

The meeting reviewed, inter alia, cash management and market borrowings by the states and issues relating to fiscal consolidation.