India’s FX Reserves Near $693 Billion After Big Weekly Jump

currency risk if the rupee moves. The payoff is on the RBI’s balance sheet: it ends up holding more spot dollars, which can be used to meet demand in the local market rather than leaning as hard on the forward market. That matters at a time when oil-price swings can quickly change India’s import bill and pressure the currency.

Why should I care?

For markets: The RBI’s $36.7 billion FCNR inflows may show up in cheaper dollar hedges, not just a $692.9 billion reserves headline.

This program doesn’t only add to reserves; it shifts FX risk from banks to the RBI via the swap window. With more spot dollars on hand, the central bank can meet hedging and funding needs without building as many forward contracts that effectively leave it “short” dollars later. If that short FX position shrinks, it can take some heat out of the onshore forward premium – the extra cost companies and investors pay to lock in future dollars – and reduce day-to-day USD/INR volatility when energy headlines hit.