According to figures issued by the Reserve Bank of India on Friday, India's foreign exchange reserves increased by $4 billion to $620 billion in the week ending December 22. As of December 22, the central bank had added $57.59 billion to its kitty in the current fiscal year.

The prior week saw an increase in total reserves due to a $4.6 billion increase in foreign currency holdings. The reserves had risen to $616 billion in the previous week, the highest amount since March 25, 2022. The reserves increased by $9 billion throughout the week, the second-highest weekly increase in the current fiscal year.

So far in the current fiscal year, India's reserves have climbed by $28.4 billion, ranking fourth among major foreign exchange reserve-holding countries.

This comeback follows a difficult 2022, during which India's foreign exchange reserves fell by $70 billion. In 2023, the local market received significant foreign inflows, which kept the rupee afloat during global uncertainty. The RBI stayed active in the market throughout the year in order to reduce currency volatility.

In the current calendar year, the rupee has shown the least volatility in over three decades against the US dollar. The local currency fell 0.5% against the US dollar. The rupee has depreciated by 1.2% in the current fiscal year. The rupee depreciated by 10% against the US currency in 2022.