RBI's foreign exchange reserves climb to all-time high

Reach $328 bn in one of the sharpest rises, adding $5.85 bn during the week

The Reserve Bank of India's (RBI) foreign exchange reserves rose to an all-time high of $327.88 billion for the week ending January 30, 2014, shows RBI data released Friday. The rise in reserves were one of the sharpest as it rose by $5.85 billion during the week. The reserves had risen by $6.7 billion in the week ending July 1, 2011.

Foreign currency assets, a key component of reserves rose by $5.81 billion to $303.33 billion. Gold reserves remained unchanged during the week at $19.38 billion.

"If RBI consistently buys foreign exchange, our Balance of Payment forecasts that the RBI can reach 10 months' import cover by March 2016, well above the critical eight month import cover needed for rupee stability," said Indranil Sen Gupta, India economist at Bank of America Merrill Lynch in a note to clients.

For the week under review, the Special Drawing Rights (SDRs) rose by $24.6 million to $4.07 billion, while India's reserve position with the International Monetary Fund (IMF) was up $6.8 million to $1.1 billion.