India’s foreign exchange reserves rose almost $6.60 billion for the week ended September 28. This is the biggest gain in nearly a year.

The country’s forex reserves have been on the decline as the central bank has been intervening in the markets to protect the rupee, which has declined almost 10 per cent so far in this calendar year.

The reserves have depleted from a peak of around $642 billion in November 2021 to $524.52 billion in the week ended October 21, which was the lowest level since July 2020.

However, numbers released by the RBI on Friday showed the total reserves rising to $531.08 billion — a rise of $6.56 billion over the previous week. The spike can be attributed to the movement in foreign currency assets (FCA) which forms the largest component of the country’s forex reserves.

FCAs rose $5.77 billion to nearly $470.85 billion. The value of gold reserves also rose to $37.762 billion — a gain of $556 million.

Forex experts told The Telegraph that the rise in FCA could be due to valuation changes as the US dollar remained soft against major currencies.

Foreign currency assets are maintained as a multi-currency portfolio comprising major currencies such as the US dollar, Euro, Pound sterling, Japanese yen, and are valued in terms of US dollars.

Its movement occurs mainly on account of purchase and sale of foreign exchange by theRBI, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and changes on account of revaluation of the assets.

The rise in forex reserves came on a day the rupee staged a strong rally against the dollar as it rose by 54 paise to close at 82.44. The greenback remained weak globally.

The US dollar index, which gauges its strength against a basket of six currencies, was trading at 111.24 against the previous close of 112.93.