MUMBAI: India’s foreign exchange reserves rose by $7.3 billion to $674.2 billion in the week ended July 3, driven largely by an increase in foreign currency assets and a rise in the value of gold holdings. The gain reflects both valuation effects and accretion in underlying assets, with the two dominant components of reserves accounting for the bulk of the weekly increase.Foreign currency assets, the largest component of reserves, increased by $4.5 billion during the week to $545.6 billion. This rise was influenced by changes in the valuation of major currencies held in the reserves basket, particularly against the US dollar, as well as possible inflows into the system. Given their dominant share, even modest valuation gains in these assets tend to have a significant impact on overall reserves.Gold reserves recorded a sharper relative increase, rising by $2.7 billion to $105.2 billion. The uptick was primarily on account of firming international gold prices, which boosted the dollar value of the Reserve Bank’s gold holdings. Gold has increasingly contributed to fluctuations in reserves in recent periods as price movements in global markets have become more pronounced.