MUMBAI– India’s foreign exchange reserves climbed by $3.51 billion to $694.23 billion for the week ending August 29, the Reserve Bank of India (RBI) reported Friday.
The increase was driven by a rise in both foreign currency assets and gold holdings. Foreign currency assets, the largest component of the reserves, rose by $1.69 billion to $583.94 billion. These assets, expressed in U.S. dollar terms, reflect valuation changes in non-dollar currencies such as the euro, pound and yen.
Gold reserves surged by $1.77 billion to $86.77 billion, continuing a trend of central banks worldwide increasing gold holdings as a hedge against global uncertainty. The RBI’s gold share in overall reserves has nearly doubled since 2021. Special drawing rights also edged up by $40 million to $18.78 billion.
Analysts said the growing forex cushion strengthens the RBI’s ability to stabilize the rupee in volatile markets. With the current reserves, India can cover more than 11 months of goods imports and about 96 percent of its external debt obligations, according to RBI Governor Sanjay Malhotra.
“Overall, India’s external sector remains resilient as key external vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements,” Malhotra said recently.
The upbeat reserves data comes alongside stronger trade numbers. India’s merchandise exports rose 7.29 percent in July to $37.24 billion, compared with $34.71 billion a year earlier. Commerce Secretary Sunil Barthwal said both goods and services exports are growing at a pace that outstrips global trade.
Engineering products, electronics, pharmaceuticals, chemicals and gems and jewelry were among the key drivers of export growth in July, officials said. (Source: IANS)
