The Reserve Bank of India‘s foreign exchange reserves increased by $2.9 billion, i.e. worth $564.07 billion, on December 9. This is the fifth repeated week of an upsurge in the central bank’s coffers.

The previous week’s upsurge was due to an increase in the RBI’s Foreign Currency Assets, rising by $3.1 billion to $500.13 billion, as the latest data showed. The data revealed that in the week ended December 9, the RBI’s gold reserves decayed by $296 million to $40.73 billion.

The rupee also depreciated 1.2% versus the US dollar, completing 82.28. So far, in 2022, the rupee has weakened by 10.3% versus the greenback. Since the past five weeks, the RBI’s reserves have augmented considerably due to a steep decline in the US dollar index.

In the week ended December 2, the reserves hiked $11.02 billion to $561.16 billion, resulting in their highest levels since August 26. As of October 28, the reserves were estimated at $531.08 billion.

According to market analysts, the increase in the RBI’s reserves is due to readjustment and RBI’s greenback purchases, replenishing its reserves.

The RBI’s reserves weakened sharply in 2022, somewhat due to dollar sales by RBI to prevent extreme volatility in the Rupee’s Exchange Rate. The rupee has observed bouts of volatility this year amid Russia’s invasion of Ukraine and the aggressive rate hikes conceded by the US Federal Reserve.

As of February 25, the time of the Russian invasion, the RBI’s reserves were estimated at $631.35 billion. This glinted a global investment flight, safeguarding the US dollar. Funds worth $530 billion, as of November 4, enclosed 8.6 months of imports predictable for the current fiscal year, the RBI mentioned.