India’s forex reserves jumped $11.47 billion to a record $740.8 billion in the week ended August 28
Foreign currency assets rose $9.34 billion, while gold reserves increased $2.19 billion
The reserve build-up has accelerated since the RBI’s concessional forex swap measures in June
India’s Forex Reserves Rise To Record High Of $740.8 Bn
India’s reserves had previously touched a high of $728.494 billion in the week ended February 27, before the escalation of the West Asia conflict
India’s Forex Reserves Rise To Record $740.8 Bn
Summary
Advertisement
India’s foreign exchange reserves rose by $11.475 billion to a fresh record of $740.803 billion in the week ended August 28, according to data released by the Reserve Bank of India (RBI) on Friday.
The increase follows a rise of $12.422 billion in the previous reporting week, when the reserves had reached $729.328 billion.
The latest figures mark the second consecutive weekly increase of more than $11 billion, taking the country’s forex stock to a new all-time high.
Forex Reserves Rebound Amid War
India’s reserves had previously touched a high of $728.494 billion in the week ended February 27, before the escalation of the West Asia conflict.
The geopolitical uncertainty put pressure on the rupee and prompted the RBI to intervene in the foreign exchange market through dollar sales, resulting in a decline in reserves over several weeks.
Advertisement
The recovery has gathered pace since June, when the RBI introduced concessional foreign exchange swap measures amid a sharp depreciation in the rupee.
The initiatives have generated more than $136 billion in fresh flows.
Foreign Currency Assets Lead Increase
Foreign currency assets (FCAs), the largest component of India’s reserves, rose by $9.337 billion during the week to $600.67 billion, the RBI said.
FCAs are reported in dollar terms and include the impact of movements in the value of major non-US currencies held in the reserves, including the euro, pound and yen.
Gold reserves also recorded a significant increase, rising by $2.191 billion to $116.409 billion during the week, the RBI data showed.
Special drawing rights (SDRs), an international reserve asset created by the International Monetary Fund (IMF), declined by $43 million to $18.81 billion during the reporting week, as per RBI.
Advertisement
India’s reserve position with the IMF also fell by $11 million to $4.914 billion at the end of the week, the data showed.
ASSOCHAM President Nirmal K Minda lauded the rise in India's forex kitty stating that a robust position will contribute to greater currency stability, strengthen macroeconomic resilience, support economic growth and enhance investor confidence.
The record accumulation of foreign exchange reserves provides a strong cushion against global economic uncertainties and external shocks, he added.