India’s foreign exchange reserves rose by a record $11.9 billion during the week ended September 28 to top $248 billion as foreign portfolio investors poured money into stocks in the second-fastest growing economy in the world.

Last week’s inflows are reckoned to be one of the highest ever and had the effect of strengthening the rupee, which has gained over 10% against the dollar since April this year.

According to data released by the Reserve Bank of India (RBI) in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and special drawing rights (SDR) rose $11.9 billion during the week ended September 28. While the forex assets rose $11,383 million, the value of gold in reserves was up by $486 million. Though the value of SDR in reserves remained unchanged, the reserves with the IMF rose by $2 million.

The Reserve Bank has mopped up $48.6 billion since April this year, releasing rupee funds worth Rs 1,16,382 crore. The central bank has been up against strong capital inflows since April this year. The inflows accelerated specially after the US Federal Reserve cut its benchmark interest rates by 50 basis points recently. This led to the rupee breaching the psychological Rs 40 barrier against the dollar, inspite of a mopup of close to $12 billion by the central bank during the week. The strong inflows have also posed a liquidity management challenge to the central bank.

The central bank data shows that the Centre has refrained from resorting to ways and means advances (WMA) to meet its temporary revenue mismatches, indicating a comfortable revenue position. It has instead parked surplus funds to the tune of Rs 10,871crore as on September 28 with the central bank, down Rs 12,960 crore over the previous fortnight’s levels. The states, however, continued to rely on the central bank to meet their temporary revenue shortfall. They borrowed an additional Rs 398 crore from the central bank to take their outstanding stock of WMA to Rs 893 crore as on September 28.