India’s foreign exchange reserves have already crossed a new milestone of US$ 700 billion. Overall, India’s external sector remains resilient as key external sector vulnerability indicators continue to improve, said Reserve Bank of India’s Governor Shaktikanta Das on Wednesday.
While announcing the Monetary Policy decision, Das said, “We remain confident of meeting our external financing requirements comfortably.”
On the external financing side, foreign portfolio investment (FPI) flows have seen a turnaround from net outflows of US$ 4.2 billion in April-May 2024 to net inflows of US$ 19.2 billion during June-October (till October 7, 2024).
Foreign direct investment (FDI) flows remain strong in 2024-25 as both gross and net FDI inflows improved in April-July 2024.
While external commercial borrowings moderated, non-resident deposits recorded higher net inflows than last year.
India’s forex reserves have continuously risen with the kitty surging $12.5 billion during the week ended September 27 to hit an all-time high of $704.89 billion. In the previous week ended September 20, the forex reserves had jumped by $2.8 billion to $692.3.
India’s gold reserves rose $2.184 billion to $65.796 billion during the week ended September 27.
During that week, foreign currency assets, a major component of the reserves, increased by $10.468 billion to $616.154 billion.
The RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, to prevent a steep depreciation in the rupee.
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