India Forex Reserves Hit Record $785.7 Billion

In the last week India’s Foreign Exchange Reserves witnessed the high jump and it has been valued at the $740.803 billion. Foreign exchange reserves had come under pressure due to the fall in the value of the rupee due to the tensions that arose in the West Asia region. The RBI had interfered in the foreign exchange market by selling dollars. However, the situation improved when the central bank introduced the concessional forex swap policy in June which helped to increase foreign currency inflows in the market and increased its liquidity.

Foreign Currency Assets Make the Biggest Jump

Foreign currency assets, the biggest part of India’s reserves, have made the highest jump in this case.

As per the RBI, FCAs had increased by $47.498 billion during this period and reached the level of $648.168 billion.

FCAs are expressed in US dollars but can include the value change in other currencies like the euro, pound, and yen which are also part of India’s foreign exchange reserves.

Rise in Reserves through FCNR(B) Deposit Window

The increase in reserves is due to large scale inflow through the special measures announced by RBI for foreign currency deposits.

The Foreign Currency Non-Resident (Bank) deposit window received deposits worth $127.226 billion till August 31. Including overseas foreign currency borrowings and external commercial borrowings, total inflow stood at $136.377 billion.

This window was opened on June 8 and was supposed to be kept open until September 30. However, RBI prematurely closed it on August 31 after mentioning that its purpose had been fulfilled before time.

India Gold Reserves Drop

Not all the components of India’s reserves saw growth last week.

The reserves of gold of India fell by $2.594 billion and reached $113.816 billion.

On the other hand, the reserves of SDRs of India with the IMF fell by $4 million and reached $18.806 billion.