Mumbai, Oct 20 (IANS): India's forex reserves increased by $1.15 billion to $585.895 billion for the week ended October 13, reversing a continuous decline over the preceding five weeks, RBI data released on Friday showed.

This comes as a welcome development as a stronger forex kitty gives the RBI more headroom to support the rupee by releasing more dollars in the market. This comes necessary, especially at a time when oil prices shoot up in the global market and the demand for dollars suddenly goes up to finance crude imports.

The country’s foreign exchange reserves had fallen by $2.166 billion toa five-month low of $584.74 billion for the week ended October 6, according RBI data released last week. The decline had come on top of a close to $12 billion drop in foreign exchange reserves in the preceding four weeks.

TheRBIintervenes in the spot and forwards markets by releasing more dollars to prevent the rupee from going into a free fall when it comes under pressure.

Any sharp decline in the country’sforexkittylimits the scope for theRBIto intervene in the market to stabilise the rupee.