Fresh all-time high forex to further boost country’s external sector resilience
India’s forex reserves have reached a new milestone, jumping $5.2 billion to a fresh all-time high of $689.24 billion, according to industry experts. This surge is expected to enhance the country’s external sector resilience and stimulate economic growth across various sectors.
Forex Reserves Breakdown:
The weekly data provided by the Reserve Bank of India (RBI) revealed that foreign currency assets (FCAs) increased by $5.10 billion to reach $604.1 billion by the week ending September 6. Gold reserves also saw a rise of $129 million, reaching $61.988 billion, making it the second largest contributor to India’s forex reserves. Additionally, the Special Drawing Rights (SDRs) increased by $4 million to $18.472 billion, and the country’s reserve position with the International Monetary Fund (IMF) grew by $9 million to $4.631 billion.
Implications for Monetary Policy:
The significant growth in India’s foreign exchange reserves will offer the RBI greater flexibility in terms of monetary policy and currency management. This will enable the central bank to intervene in the market when necessary, including through the selling of dollars, to prevent sharp depreciations in the rupee’s value.
The Road Ahead:
Industry experts anticipate that India’s strong forex reserves, supported by prudent policy measures and a vigilant monetary policy stance, will contribute to the country’s economic growth trajectory. These reserves will not only strengthen India’s international position but also attract foreign investments and promote domestic trade and industry. India is currently the fourth largest foreign exchange reserve holder globally and remains a top destination for foreign investment.
Source : www.socialnews.xyz