India's foreign exchange reserves climb to record $729.33 billion

Reserve Bank of India figures show that the country's foreign exchange reserves jumped $12.422 billion in the week to Aug. 21, pushing the total to a record $729.328 billion. This increase continues an eight-week streak that has added about $63 billion, surpassing the prior high set in February. The biggest component, foreign currency assets, rose alongside a $2.801 billion rise in gold reserves, while SDRs and the IMF reserve position each saw modest gains.

The growth follows a suite of measures launched in June to attract overseas dollar inflows, such as discounted hedging for state-run enterprises and cost-free hedging for banks, which together drew roughly $73 billion, most of it from non-resident Indian deposits. The RBI responded by moving the closure date of its deposit-hedging facility forward to the end of August. Analysts note that part of the rise reflects RBI dollar purchases and valuation gains, while regular market interventions have tempered some of the inflows.