Forex reserves rise to near-all-time high; rupee falls

The nation's foreign exchange reserves rose for the sixth consecutive week to a near-all-time high, as the central bank accumulated dollars to prevent volatility in the forex market after foreign funds continued to pour money into Indian assets.

Forex reserves rose $643 million for the week to July 11, taking the total to $317.037 billion, the Reserve Bank of India said. The reserves are just about $4 billion less than the record high of $321 billion.

Building reserves is important for any central bank as they offer a buffer against future volatility. For instance, RBI intervened in the market by selling dollars to support the rupee when the local currency went on a tailspin last year after foreign investors pulled out their money. Foreign-currency assets, a major contributor to reserves, rose $648.7 million to $290.222 billion in the week to July 11, the central bank said.