India’s Forex Reserves Increase To $698.95 Billion

Forex Reserves: India’s foreign exchange reserves rose by $2.29 billion to reach $698.95 billion for the week ending June 13, the Reserve Bank of India (RBI) reported on Friday.

The country’s reserves had stood at $696.66 billion the previous week, which had already seen a jump of $5.17 billion. With this two-week surge of nearly $7.5 billion, India is approaching its record high of $704.885 billion, last seen at the end of September 2023.

For the latest week, foreign currency assets, the largest portion of the reserves, rose by $1.73 billion to $589.42 billion.

Gold reserves also increased by $428 million to $86.32 billion, the RBI data showed. Central banks around the world, including the RBI, have been increasing gold holdings amid rising geopolitical tensions.

Since 2021, the share of gold in India’s forex reserves has almost doubled.

The Special Drawing Rights (SDRs) climbed by $85 million to $18.76 billion, and India’s IMF reserve position rose by $43 million to $4.45 billion for the same week.

RBI highlights strong external sector

RBI Governor Sanjay Malhotra said earlier this month that India’s forex reserves can cover over 11 months of goods imports and about 96% of the country’s external debt.

He noted that India’s external sector remains resilient, with key vulnerability indicators improving steadily.

A rising forex reserve reflects the strength of India’s economy and offers the RBI greater flexibility to manage rupee volatility.

The central bank can release dollars into the spot and forward currency markets when needed to avoid steep depreciation of the rupee.

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