India’s foreign exchange reserves cross $700 billion for first time

NEW DELHI:

Despite geo-political uncertainties, the investors' confidence remained intact in India's growth story as the country's foreign exchange reserves surpassed $700 billion for the first time, reaching $704.89 billion in the week ending September 27, the Reserve Bank of India (RBI) data showed on Friday.

 

The forex surged $12.59 billion, which is the largest weekly rise since mid-July 2023.

 

With this, India joins the ranks of only three other countries - China, Japan, and Switzerland - which have crossed the $700 billion threshold in reserves.

 

As per the central bank, foreign currency assets (FCAs) increased by $10.4 billion, bringing the total to $616 billion. Gold reserves also witnessed a rise of $2 billion, reaching $65.7 billion.

 

According to the RBI’s Weekly Statistical Supplement, Special Drawing Rights (SDRs) experienced a modest increase of $8 million, reaching $18.547 billion. The country’s reserve position in the International Monetary Fund (IMF) witnessed a slight decrease of $71 million, settling at $4.3 billion for the week.

 

Foreign inflows into the country this year have reached $30 billion. Looking ahead, India’s forex reserves are projected to grow further. India’s strong forex will boost its economic growth trajectory by strengthening its position internationally, drawing in foreign investments, and promoting domestic trade and industry.

 

Despite global economic headwinds and deepening geopolitical uncertainties, the forex reserves are at record all-time high levels. The rupee is now the most stable currency among major economies. The country is currently seeing strong domestic flows. FPI flows into debt markets have also picked up. The positive FPI flows have helped in achieving record forex levels in the country. This is set to create external sector resilience and boost the economy across sectors. The substantial foreign exchange reserves will provide the RBI with greater flexibility in monetary policy and currency management.

 


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