Mumbai— India’s foreign exchange reserves saw a significant rise of $4.5 billion, reaching an all-time high of $690.62 billion for the week ending May 9, according to data released Friday by the Reserve Bank of India (RBI).
The increase was primarily driven by a rise in foreign currency assets, which climbed by $196 million to $581.37 billion. These assets, a key component of the reserves, are influenced by fluctuations in major global currencies such as the euro, pound sterling, and yen when expressed in U.S. dollar terms.
Gold reserves also posted modest gains, inching up by $4.5 million to total $86.33 billion during the week.
However, not all indicators moved upward. The RBI reported a $26 million decline in Special Drawing Rights (SDRs), bringing them down to $18.53 billion. Additionally, India’s reserve position with the International Monetary Fund (IMF) dropped by $134 million to $4.37 billion.
A robust foreign exchange reserve position is a key indicator of economic stability, providing the RBI with greater flexibility to manage the rupee’s value against the U.S. dollar. When reserves are strong, the central bank is better positioned to step in and stabilize the currency during periods of volatility by selling dollars in the spot and forward markets.
Conversely, a shrinking reserve base can limit the RBI’s ability to support the rupee, increasing risks of sudden depreciation.
In a positive development for India’s external sector, the country’s total exports of goods and services surged by 12.7% in April, reaching $73.80 billion. This marked a strong performance compared to $65.48 billion recorded in April last year, despite headwinds from global economic uncertainty and tariff hikes from the U.S.
Merchandise exports alone rose by 9.03% to $38.49 billion. Notably, high-value segments such as electronics and engineering goods saw substantial growth. Exports of electronic goods soared by 39.51%, hitting $3.69 billion, up from $2.65 billion in April 2024. Engineering goods exports climbed 11.28% to $9.51 billion, while gems and jewelry exports grew by 10.74%, reaching $2.5 billion.
These figures underscore India’s expanding manufacturing capabilities and its strengthening position in global trade, reinforcing the broader economic resilience reflected in the latest forex data. (Source: IANS)
