The foreign exchange reserves in India has surged by $12.422 billion to a new all-time high of $729.328 billion during the week ended August 21, according to the data released by the Reserve Bank of India (RBI).
This mark a sharp build-up in external reserves as India’s previous forex reserve high of $728.494 billion was recorded in the week ended February 27, before the onset of the Middle East conflict.
Foreign currency assets, the largest component of India’s reserves, drove the latest increase, rising by $9.482 billion to $591.333 billion during the week, the RBI data said.
Due to the Iran war, leading to severe disruption in the supply chain, several weeks of declines in the forex came as the rupee came under pressure and the RBI stepped in with dollar sales to support the currency.
Gold reserves also contributed significantly, climbing by $2.801 billion to $114.218 billion, data said. The value of gold held as part of the reserves climbed by USD 2.80 billion to USD 114.22 billion during the week.
Further, the Foreign currency assets (FCAs) which is the largest component of India’s reserves increased by USD 9.48 billion during the week to USD 591.33 billion. On a year-on-year basis, FCAs were higher by USD 9.08 billion. In rupee terms, FCAs rose by Rs 1.08 lakh crore over the week to Rs 56.60 lakh crore.
As per the RBI data, Special Drawing Rights (SDRs) with the IMF rose by USD 112 million to USD 18.85 billion, while the country’s reserve position in the IMF increased by USD 26 million to USD 4.93 billion during the week.
Earlier in June, the Reserve Bank of India (RBI) unveiled measures to boost dollar inflows. These included discounted hedging facilities for overseas borrowings by state-run firms and banks, and a free-of-cost hedging facility for banks to raise overseas FX deposits.
The Reserve Bank of India received nearly $73 billion under these schemes between June 5 and August 21, including about $65 billion from non-resident Indian deposits.
India’s Forex Kitty Touches All-Time High Of $729.328 billion, Gold Reserves Surge Too
