India’s foreign exchange reserves rose to a four-month high of $707 billion as of August 7, up from $692.87 billion a week earlier, according to Reserve Bank of India data. The $14.1 billion increase was the largest weekly gain since January and extended a six-week rise of about $40 billion. Foreign currency assets climbed by $9.9 billion to $574.63 billion, while gold holdings increased to $108.74 billion, Special Drawing Rights rose to $18.75 billion and India’s reserve tranche position at the International Monetary Fund increased to $4.89 billion. The buildup has been supported by policy measures announced in June to strengthen India’s balance of payments, including discounted hedging for overseas borrowings by state-run firms and banks, tax cuts on foreign investments in government bonds and a free hedging facility for banks raising overseas foreign-currency deposits. Between June 8 and July 31, the swap facilities drew more than $40 billion of flows, while foreign investors made net purchases of over $2.5 billion in Indian government bonds under the fully accessible route. Analysts said recent RBI intervention to defend the rupee likely offset part of the impact of those overseas dollar inflows. Weekly changes in reserves also reflect valuation effects on non-dollar assets held by the central bank.