India’s forex reserves hit over 20-month high, jump $9.112 bn to $615.971 bn
India’s foreign exchange reserves rose for the fifth straight week, reaching an over 20-month high of $615.97 billion as of Dec. 15, data from the Reserve Bank of India (RBI) showed on Friday.
The reserves rose by $9.1 billion in the reporting week, after climbing by a total of $16.5 billion in the prior four weeks.
Indian debt and equity markets have seen net inflows of $9.2 billion so far in December, after receiving $2.9 billion in November.
India’s foreign exchange reserves include cash, bank deposits, bonds, and other financial assets denominated in currencies other than the Indian rupee. Notably, stronger foreign currency reserves allow developing market central banks to “buffer their currencies against sharp declines by supplying dollars to the market” at times of volatility.
India’s foreign currency assets (FCA), the biggest component of the forex reserves, rose USD 8.349 billion to USD 545.048 billion, the central bank’s weekly statistical data showed. FCA includes the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves during the week rose by USD 446 million to USD 47.577 billion. Before December 15 week, India’s total foreign exchange reserves rose from USD 2.816 billion to USD 606.859 billion.
In October 2021, the country’s forex kitty reached an all-time high of USD 645 billion. The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global developments since last year.
For the week ended December 15, the foreign currency assets, a major component of the reserves, increased USD 8.349 billion to USD 545.048 billion, as per the Reserve Bank of India (RBI) data released on December 22.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves. Gold reserves were up USD 446 million to USD 47.577 billion during the week, the RBI said.
The Special Drawing Rights (SDRs) were up USD 135 million to USD 18.323 billion, the apex bank said. India’s reserve position with the IMF rose USD 181 million to USD 5.023 billion in the reporting week, the apex bank data showed.
Forex reserves or foreign exchange reserves (FX reserves) are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies usually the US Dollar and to a lesser degree the Euro, Japanese Yen, and Pound Sterling.
It is used to back its liabilities – like the native currency issued and also reserves deposited by financial institutions or the government with the central bank.
With inputs from agencies.
India’s forex reserves hit over 20-month high, jump $9.112 bn to $615.971 bnRead More
