Indian Forex Reserves Rise To $653.7 Billion
The rise in forex reserves is despite the RBI selling dollars to ease pressure off the rupee.
India's foreign exchange reserves jumped to $653.7 billion for the week-ended June 21, aided by a rise in gold stock, even as foreign currency assets dipped, the Reserve Bank of India data showed on Friday. The forex kitty rose by $816 million over the previous reporting week.
The increase in forex reserves comes despite the RBI reportedly intervening in the domestic currency market, amid pressure on the rupee, by selling dollars from its reserves. The local currency depreciated by 0.3% in June.
The forex stock had recovered after hitting a low of $524.5 billion in October 2022, as the central bank replenished its kitty amid solid overseas inflows.
Foreign investors have pumped in Rs 89,806 crore into the country's debt and equity markets so far this year, according to data from the National Securities Depository Ltd. While equities witnessed a flight of foreign capital, the domestic debt market has seen big inflows.
More robust greenback inflows are expected following India's inclusion in JPMorgan's Government Bond Index-Emerging Markets on Friday.
For the week-ended June 21, foreign currency assets—a major component of the reserves—declined by $106 million to $574.1 billion, RBI data showed.
In dollar terms, foreign currency assets include the effect of the appreciation or depreciation of non-US units like the euro, pound and yen held in foreign exchange reserves.
Gold reserves increased by $988 million to $56.9 billion during the week.
Last month, RBI Governor Shaktikanta Das said the central bank is focused on building robust buffers of foreign currency reserves through its intervention in the dollar-rupee currency market.
"It's our prime focus to build up a strong umbrella in the form of substantial quantum of forex reserves, which will help us when the cycle turns or when it rains heavily," Das said.
