India’s foreign exchange reserves have soared to an unprecedented $729.33 billion, marking a significant $12.42 billion jump in the week ended August 21, driven by robust increases in foreign currency assets and gold holdings.
Illustration: Dado Ruvic/Reuters
Key Points
- India’s forex reserves reached a new all-time high of $729.33 billion for the week ended August 21, marking an increase of $12.42 billion.
- This new record surpasses the previous high of $728.49 billion recorded in February, before the West Asia conflict.
- Foreign currency assets, a major component, rose by $9.48 billion to $591.33 billion.
- The value of gold reserves also saw a significant increase, up by $2.80 billion to $114.22 billion.
- The central bank and government had previously implemented measures, including FCNR(B), to attract more forex flows, receiving $72 billion under concessional swap measures.
India’s forex reserves jumped $12.42 billion to a new all-time high of $729.33 billion during the week ended August 21, the RBI said on Friday.
In the previous reporting week, the kitty had increased $9.9 billion to $716.91 billion.
Previous Records and Geopolitical Impact
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.
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.
For the week ended August 21, foreign currency assets, a major component of the reserves, increased $9.48 billion to $591.33 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 foreign exchange reserves.
Measures to Boost Forex Inflows
It can be recalled that the central bank and the government had last month launched a series of measures, including the FCNR(B), to attract more forex flows into the country.
The country has so far received $72 billion under the concessional swap measures.
Value of gold reserves increased $2.8 billion to $114.22 billion during the week, the RBI said.
The special drawing rights (SDRs) were up by $112 million at $18.85 billion, the apex bank said.
India’s reserve position with the IMF was also up $26 million to $4.92 billion at the end of the reporting week, according to the apex bank’s data.
