In one of the biggest weekly accretion in recent times, India's foreign exchange reserves swelled by $6.695 billion to $315.715 billion in the week ended July 1, according to the Weekly Statistical Supplement released by the Reserve Bank of India.

This $6.695-billion booster accounts for 65 per cent of the cumulative accretion of $10.229 billion to the forex reserves since April 1, 2011.

The reserves had decreased by $1.542 billion to $309.020 billion in the previous week ended June 24.

The increase in reserves is mainly on account of currency revaluation. In the week under consideration, foreign currency assets jumped by $6.365 billion to $283.458 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen, held in reserves.

The euro had strengthened against the dollar in the week. It had moved from $1.421 at the beginning of the week to $1.447 on July 1.

RBI intervention?

“A host of factors could have led to the accretion in forex reserves. The RBI could have intervened in the market to arrest appreciation in the rupee. Further, the rupee could have been converted into dollars to acquire assets overseas,” said Mr Moses Harding, EVP & Head (Global Markets Group), IndusInd Bank

In the week under review, the country's reserve position at the International Monetary Fund rose by $21 million to $2.975 billion. Gold reserves also went up by $277 million to $24.668 billion, while SDRs saw a $32-million increase to $4.614 billion.

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