India’s forex reserves jumped $4.307 billion to a new all-time high of $655.817 billion for the week ended June 7, according to the latest RBI data. The reserves had increased by $4.837 billion to $651.51 billion in the previous reporting week.
The previous high for the reserves, a crucial safeguard against disturbances in the external sector, was $648.87 billion on May 10. In recent weeks, the reserves have witnessed significant growth.
Gold Reserves and Special Drawing Rights (SDRs)
Gold reserves increased by $481 million to $56.982 billion during the week ended June 7. The special drawing rights (SDRs) rose by $43 million to $18.161 billion, the RBI reported.
Foreign Currency Assets and IMF Reserve Position
For the week ended June 7, foreign currency assets, a major component of the reserves, increased by $3.773 billion to $576.337 billion, according to the RBI data. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
India’s reserve position with the IMF increased by $10 million to $4.336 billion during the reporting week, the RBI data showed.
Impact on India’s Economy
Sanjeev Agrawal, president of PHD Chamber of Commerce and Industry, said: “India has shown remarkable resilience amidst global challenges, continuously moving on a high growth trajectory. It is highly appreciable that, on the back of prudent policy measures and vigilant monetary policy stance, forex has reached a new all-time high level of $655 billion. This would accelerate India’s economic growth to new highs, bolstering its global stature.”
This increase in forex reserves will boost India’s worldwide attractiveness, supporting domestic trade and industry. The significant foreign exchange reserves provide the Reserve Bank with greater flexibility in managing the country’s currency and monetary policy amidst geopolitical conditions and global macroeconomic challenges, Agrawal added.
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