Mumbai — India’s foreign exchange reserves rose by $7.26 billion to $674.19 billion in the week ended July 3, reversing the previous week’s decline, according to Reserve Bank of India data released Friday.
Gold reserves increased by $2.67 billion to $105.21 billion during the week.
India’s holdings of Special Drawing Rights with the International Monetary Fund also rose by $65 million to $18.62 billion.
The increase came after foreign exchange reserves fell by $5.65 billion to $666.93 billion in the week ended June 26.
Despite recent volatility, India’s reserves remain among the highest in the world, though still below the record high of $728.49 billion reached in the week ended February 27.
Banks have also seen a gradual rise in overseas fund inflows after the rollout of the Reserve Bank of India’s revised Foreign Currency Non-Resident Bank deposit scheme. Lenders expect collections to accelerate this month as awareness among non-resident Indians grows.
The banking industry has mobilized an estimated $3 billion to $4 billion through FCNR-B deposits so far, according to reports. Bankers expect inflows to gather pace in the coming weeks, particularly from non-resident Indians based in the Gulf region.
The revised scheme is expected to attract $40 billion to $50 billion in fresh FCNR-B deposits over time, bankers said. Higher interest rates and the RBI’s decision to bear banks’ hedging costs are expected to support deposit mobilization.
Banks have stepped up outreach efforts to raise awareness of the revised FCNR-B scheme among overseas depositors, with lenders engaging more actively with NRI customers in key markets.
Bankers expect the Gulf region to account for a significant share of incremental deposits, driven by Indian expatriates living and working there. (Source: IANS)
