India’s foreign exchange reserves increased by $2.4 billion to $596.1 billion in the week ended June 16. This information comes from data released by the Reserve Bank of India (RBI). The rise was primarily due to an increase in foreign currency assets (FCAs). FCAs grew by $2.35 billion to reach $533.3 billion.
Foreign currency assets (FCAs) consist of investments in US treasury securities, bonds issued by other central banks, and deposits held in foreign banks. The increase in FCAs was partially offset by a decline in gold reserves. Gold reserves fell by $100 million, reaching $39.1 billion.
The increase in India’s forex reserves is a positive indicator for the country’s economy. It suggests that there is strong demand for Indian assets among foreign investors. This can help support the value of the rupee and reduce India’s susceptibility to external shocks.
As of now, the RBI’s forex reserves are at their highest level since October 2021. This is the result of various factors, including significant foreign direct investment inflows and the RBI’s intervention in the foreign exchange market to purchase dollars.
The Reserve Bank of India will continue to closely monitor the forex market. They will take necessary measures to ensure that the country maintains adequate reserves to fulfill its external payment obligations.
