India's Forex Reserves Soar By Nearly $10 Billion To Hit New Record
India's forex kitty reached an all-time high of $666.85 billion for the week-ended July 12, RBI data showed.
India's foreign exchange reserves reached an all-time high of $666.9 billion for the week ended July 12, the Reserve Bank of India data showed on Friday. The forex kitty rose by $9.7 billion over the previous reporting week.
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 1.3 lakh crore into the country's debt and equity markets so far this year, according to data from the National Securities Depository Ltd. The capital flow has mostly gone into the domestic debt market, while equities have seen lower inflows.
For the week-ended July 12, foreign currency assets—a major component of the reserves—rose by $8.3 billion to $585.4 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 $1.2 billion to $58.6 billion during the week.
Last month, RBI Governor Shaktikanta Das said that 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.
India remains the fourth highest foreign exchange reserves holder in the world. The reserves is equivalent of around 11 months of imports projected for fiscal 2025, and about 99% of total external debt outstanding at end of March, the central bank said in its July bulletin.
The rupee has begun to gain in July on the back of strong capital inflows, barring intermittent corrections, in spite of increase in the trade deficit and firming international crude prices weighing on the downside, the RBI said. Currency hedging costs have accordingly become lower than earlier.
