$44.9 BILLION WEEKLY SURGE: INDIA’S FOREX KITTY SCALES NEW HEIGHTS OF $785.7 BILLION
India's foreign reserves soared by a significant USD 44.903 billion in the week ended September 4, hitting a new lifetime high of USD 785.706 billion, according to data released by the Reserve Bank on Friday, September 11. With this, the nation's forex kitty continued its upward momentum for this tenth straight week, jumping by almost $120 billion during this period, as per Reuters.
In the previous reporting week, the overall reserves increased by USD 11.475 billion to a new all-time high of USD 740.803 billion.
What's Causing the Massive Uptick In India's Forex Reserves: Key Points
Earlier this year, India’s foreign kitty had been declining due to the commencement of the Middle East war between the US and Iran. The rupee came under pressure amid elevated crude prices and strengthening of the dollar index. Consequently, RBI had to intervene in the forex market through dollar sales.
However, reserves started increasing after RBI’s strategic move, announcing a concessional forex swap program in June this year. The RBI’s move was aimed at giving a cushion to the Indian currency after a sharp depreciation. Through the swap, the RBI got more than $136 billion in new capital.
For the week ended Sept 4, foreign currency assets, a major component of reserves, rose $47.498 billion to $648.168 billion, according to central bank data.
Foreign currency assets in dollar terms also include the effect of appreciation or depreciation of non-U.S. currencies such as the euro, pound and yen held in foreign exchange reserves.
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Gold Reserve Declines
The RBI said gold reserves fell by $2.594 billion to $113.816 billion this week. India's reserve position with the IMF rose by $2 million to $4.916 billion at the end of the reporting week, according to data from the apex bank.
India's Forex Reserve Latest Data: FAQs
- How much did India's forex reserves grow in the latest week? India's foreign exchange reserves rose by USD 44.903 billion for the week ended September 4, reaching a record high of USD 785.706 billion.
- What factors contributed to the recent surge in forex reserves? The reserves have grown primarily due to the Reserve Bank of India’s (RBI) strategic concessional forex swap program launched in June, which injected over $136 billion in new capital to cushion the rupee against depreciation.
- Did all components of the forex reserves increase this week? No, while foreign currency assets rose significantly, gold reserves saw a decline of $2.594 billion, falling to $113.816 billion.
(With Inputs From Agencies)
