India’s forex reserves soared to a record $689.24 billion this week, marking a $5.2 billion increase. Industry experts believe this surge will bolster the country’s external sector resilience and positively impact various economic sectors.
The Reserve Bank of India (RBI) reported that foreign currency assets (FCAs) rose by $5.10 billion to $604.1 billion for the week ending September 6. This substantial growth highlights the strength of India’s forex reserves.
Gold reserves also saw an increase, climbing $129 million to $61.988 billion from $61.859 billion at the end of August. Gold remains the second-largest contributor to India’s forex reserves.
The Special Drawing Rights (SDRs) grew by $4 million, reaching $18.472 billion, up from $18.468 billion in August. Additionally, India’s reserve position with the International Monetary Fund (IMF) increased by $9 million to $4.631 billion.
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The RBI frequently intervenes in the market to manage liquidity and prevent steep rupee depreciation, often through dollar sales. The recent increase in forex reserves grants the RBI greater flexibility in monetary policy and currency management.
Experts emphasize that India’s robust forex reserves, coupled with prudent policy initiatives and a vigilant monetary stance, enhance economic stability amid global uncertainties. As India holds the fourth-largest forex reserves globally and is a leading recipient of foreign direct investment (FDI), this strong financial position is expected to boost economic growth, attract more foreign investments, and support domestic trade and industry.
India’s favorable investment climate continues to strengthen its international economic standing.
