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India’s foreign exchange reserves have soared to an unprecedented $740.8 billion, marking a new all-time high, as the Reserve Bank of India’s strategic forex swap initiatives continue to bolster the nation’s financial stability.
Photograph: Willy Kurniawan/Reuters
Key Points
- India’s forex reserves reached a new all-time high of $740.8 billion, increasing by $11.47 billion in the week ending August 28.
- This surge follows a previous record of $729.33 billion and surpasses the pre-Middle East conflict high of $728.49 billion.
- The increase is attributed to the Reserve Bank of India’s concessional forex swap initiatives, which have attracted over $132 billion in new flows.
- Foreign currency assets, the largest component, rose by $9.34 billion to $600.67 billion, while gold reserves increased by $2.19 billion to $116.41 billion.
India’s forex reserves jumped $11.47 billion to a new all-time high of $740.8 billion during the week ended August 28, the RBI said on Friday.
In the previous reporting week, the kitty increased $12.42 billion to a $729.33, then a record high.
Factors Driving the Surge
The previous all-time high had stood at $728.49 billion was attained during the week ended February 27 this year, right before the onset of the West Asia conflict.
The geopolitical tensions led to several weeks of a drop as the rupee and the RBI had to intervene in the forex market through dollar sales.
The reserves have been increasing since the RBI announced the concessional forex swap initiatives in June this year amid a sharp depreciation in the local currency.
The move has yielded over $132 billion in new flows.
Components of Forex Reserves
For the week ended August 28, foreign currency assets, a major component of the reserves, increased by $9.337 billion to $600.67 billion, the central bank’s data showed.
Expressed in dollar terms, foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.
Value of gold reserves increased $2.191 billion to $116.41 billion during the week, the RBI said.
The special drawing rights (SDRs) were down $43 million at $18.81 billion, the apex bank said.
India’s reserve position with the IMF were also down by $11 million to $4.91 billion at the end of the reporting week, according to the apex bank’s data.
