New Delhi: On Saturday, India’s currency reserves increased by $5.2 billion to a new all-time high of $689.24 billion. Industry experts predicted that this would strengthen external sector resilience and boost the economy across sectors.
According to the weekly data by the Reserve Bank of India (RBI), foreign currency assets (FCAs) grew by $5.10 billion to $604.1 billion (week ended September 6).
The data showed a $129 million increase in Gold reserves to $61.988 billion, compared to $61.859 billion at the end of August. Gold is the second largest contributor to India’s forex reserve.
According to RBI data, the Special Drawing Rights (SDRs) increased by $4 million to $18.472 billion, compared to their previous level of $18.468 billion at the end of August.
The country’s reserve position with the International Monetary Fund (IMF) went up $9 million to $4.631 billion.
The Central Bank occasionally intervenes in the market through liquidity management, including by selling dollars, to prevent a steep depreciation in the rupee.
The country’s considerable foreign exchange reserves will give the RBI more flexibility in future monetary policy and currency management.
According to industry experts, sensible policy actions and a diligent monetary policy attitude have helped the forex reach a fresh all-time high, notwithstanding rising geopolitical uncertainty.
He stated that, along with the RBI’s robust policies and continuing government handholding, India’s strong currency will help economic growth by enhancing its international standing, attracting foreign investment, and stimulating domestic commerce and industry going forward.
The country is also the world’s fourth-largest holder of foreign exchange reserves and one of the world’s major beneficiaries of foreign direct investment. India has become a popular worldwide investment destination, resulting in a rebound effect.
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–IANS
