India’s Forex Chest Swells: $7 Billion Surge Lifts Reserves to $692.7 Billion

India’s foreign exchange reserves made a notable rebound, climbing by $6.992 billion to reach $692.721 billion for the week ended May 23, according to the Reserve Bank of India (RBI). This sharp increase follows a previous week’s dip and signals renewed strength in the country’s external financial buffers.

 

Key Highlights

 

•⁠  ⁠Reserves Rebound: After a $4.888 billion drop the prior week, India’s forex reserves surged by nearly $7 billion, marking one of the most significant weekly gains in recent months. This brings reserves close to their all-time peak of $704.885 billion recorded in late September 2024.

 

•⁠  ⁠Foreign Currency Assets: The largest component of reserves, foreign currency assets, rose by $4.516 million to $586.167 billion. This figure reflects not only inflows but also the impact of valuation changes in non-US currencies like the euro, pound, and yen.

 

•⁠  ⁠Gold Reserves: Gold holdings increased by $2.366 billion, reaching $83.582 billion, as central banks globally continue to bolster their gold reserves amid economic uncertainties.

 

•⁠  ⁠SDRs and IMF Position: Special Drawing Rights (SDRs) rose by $81 million to $18.571 billion, while India’s reserve position with the International Monetary Fund (IMF) also strengthened by $30 million to $4.401 billion.

 

•⁠  ⁠Global Standing: India remains among the world’s top holders of foreign exchange reserves, providing robust support for the rupee and insulating the economy from external shocks.

 

Outlook

 

The latest rise in forex reserves underscores India’s resilient external sector and the RBI’s effective management of currency and liquidity. With ample reserves, India is well-positioned to weather global financial volatility and maintain macroeconomic stability in the face of shifting global economic winds.

 

Source: Financial Express, Times of India, Business Standard