New Delhi: India's foreign exchange reserves rose by $2.816 billion to hit a four-month high of $606.859 billion during the week ended December 8, according to RBI data released on Friday. The increase comes on the back of a $6.107 billion jump in the preceding week to $604.042 billion.


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This was the highest gain since the week concluding on July 14. An increase in the foreign exchange reserves is good news as it helps the RBI to stabilise the rupee. (Also Read: Who Is Lalit Khaitan? Read Tale Of 80-Year-Old India's Newest Billionaire)


The RBI intervenes in the spot and forwards currency markets by releasing more dollars to prevent the rupee from going into a free fall when it comes under pressure. (Also Read: Man Orders Groceries Once, Swiggy Delivers Six Times; Netizens Begin Meme Fest)


Any sharp decline in the country's forex kitty leaves the RBI less headroom to intervene in the market when the rupee falls.