India’s Forex Reserve Is Now Almost Twice The Pakistan’s GDP | Economy News
New Delhi: India’s foreign exchange reserves rose by USD 4.84 billion to USD 702.78 billion for the week ending June 27, close to the record high of USD 704.89 billion in September 2024, according to RBI data.
This is a strong recovery from January when reserves had dropped to around USD 624 billion. The increase came mainly from foreign currency assets, which jumped by USD 5.75 billion to USD 594.82 billion, while gold reserves fell by USD 1.23 billion to USD 84.5 billion.
Special Drawing Rights (SDRs) rose by USD 158 million to USD 18.83 billion during the week, while India’s reserve position with the IMF also increased by USD 176 million to USD 4.62 billion, as per RBI data released on July 4.
Although reserves have grown, RBI’s forward dollar book — which shows future dollar obligations — fell by USD 19 billion in April and May, reducing it to USD 65.2 billion in May from USD 88.7 billion in February. RBI’s net dollar sales in this period were modest at USD 3.2 billion.
The rupee has faced volatility since April due to global trade tensions, but RBI interventions have helped stabilize it. RBI buys dollars when the rupee is strong and sells when it weakens to control sharp fluctuations.
RBI Governor Sanjay Malhotra stated that India’s forex reserves can cover 11 months of imports and 96 percentage of external debt, reflecting India’s strong external position. A healthy forex buffer not only supports the rupee but also boosts investor confidence during global challenges.
