Mumbai— India’s foreign exchange reserves surged by $5.17 billion to reach $696.66 billion for the week ending June 6, bringing the country close to its all-time high of $704.89 billion recorded in late September 2024, according to data released by the Reserve Bank of India (RBI) on Friday.
The sharp rise in reserves strengthens the rupee’s position against the US dollar and enhances the RBI’s ability to manage currency volatility.
The increase was led by a $3.47 billion gain in foreign currency assets, which climbed to $587.69 billion. These assets include the impact of fluctuations in the value of non-US currencies such as the euro, yen, and pound, as held in the reserves.
Gold reserves also rose, up $1.6 million during the week to $85.89 billion. Central banks globally are increasingly turning to gold as a secure store of value amid ongoing geopolitical instability. The RBI’s gold holdings have nearly doubled since 2021, and gold now constitutes approximately $83.58 billion of the total forex reserves.
India’s special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $102 million to $18.67 billion, while the reserve position with the IMF increased by $14 million to $4.4 billion.
As of the previous week ending May 30, India’s forex reserves stood at $691.5 billion. The reserves are currently sufficient to cover over 11 months of goods imports and nearly 96 percent of the country’s outstanding external debt.
“Overall, India’s external sector remains resilient as key vulnerability indicators continue to improve,” RBI Governor Sanjay Malhotra said during last week’s monetary policy briefing. “We remain confident of meeting our external financing requirements.”
A robust forex reserve position also provides the central bank with greater flexibility to stabilize the rupee in times of market turbulence, including through intervention in the spot and forward currency markets. (Source: IANS)
