Forex reserves rise for second straight week, up by $1.6bn

Marking a second straight gain, the country’s foreign exchange reserves jumped in the week ended January 29, 2016 probably driven by heavy dollar buying activity by the central bank, lifting the outlook for Asia’s third biggest economy amidst ongoing global headwinds that have resulted in high financial market volatility. India’s forex reserves climbed by USD 1.59 billion to USD 349.15 billion in the week ended January 29, 2016, the Reserve Bank of India (RBI) said. In the prior week, foreign exchange reserves had climbed by USD 355.10 million to USD 347.56 billion. Foreign currency assets, which are expressed in dollar terms and include the effect of appreciation or depreciation of non US currencies such as euro, pound and yen held in reserves, rose by USD 1.58 billion to USD 326.63 billion in the week ended January 29, 2016 from the previous week, the RBI added. Foreign currency assets are the biggest component of the overall forex reserves. India's gold reserves stood unchanged at USD 17.240 billion in the week ended January 29, 2016 from the previous week, data showed. A robust forex reserves kitty will help the Indian economy overcome any possible volatility in foreign capital flows amidst heightened global economic uncertainty on account of a continued commodity slump and worries over a China slowdown.