India's foreign exchange reserves saw the biggest weekly rise in nearly two years last week following the Reserve Bank of India's concessional swap facilities offered to banks.
Forex reserves rose by $2.03 billion to $277.38 billion in the week ended September 20, according to data from the RBI.
On September 4, RBI announced special swap facilities through which banks can swap dollars raised through foreign currency non-resident deposits and overseas forex loans with RBI at a discount to the market swap rate. In a swap arrangement, the banks would sell dollars to the central bank with an agreement to buy them back at a future date.
The central bank garnered $1.4 billion through these swap facilities, governor Raghuram Rajan had said last week.
RBI's move came in the wake of a sharp depreciation of the rupee which had hit an all-time low of 68.85/$ in August. The currency ended at 62.50/% on Friday and has recouped 10% from the all-time lows.
Forex reserves, however, were still down by $16.59 billion year-on-year. RBI had sold around $8 billion in the forex market in the month of June and July, according to its latest bulletin.