RBI: India’s forex reserves recover after a two-week decline and increase by $5.9 billion to $595 billion

The Reserve Bank of India (RBI) said on Friday that India’s foreign reserves (FX) kitty increased $5.929 billion to $595.067 billion for the week ending June 2, reversing a two-week dip. In the previous reporting week, the reserves had decreased by $4.34 billion, to $589.14 billion. It should be mentioned that the nation’s foreign exchange reserves hit an all-time high of $645 billion in October 2021. The reserves have been dropping as the central bank uses its funds to protect the rupee against pressures mostly brought on by international events.

According to the Weekly Statistical Supplement provided by the RBI on Friday, the foreign currency assets, a significant part of the reserves, climbed by $5.27 billion to $526.201 billion for the week ended June 2.

The value of the gain or depreciation of non-US currencies like the euro, pound, and yen held in foreign exchange reserves is included in the foreign currency assets, expressed in dollar terms.

The RBI said that gold reserves increased by $655 million to $45.557 billion. According to the apex bank, the Special Drawing Rights (SDRs) decreased by $6 million to $18.186 billion. According to statistics from the central bank, India’s reserve position with the IMF increased by $10 million to $5.123 billion during the reporting week.

The Indian economy is robust and resilient, according to RBI Governor Shaktikanta Das, and foreign exchange reserves are at comfortable levels. Since January 2023, the Indian rupee has been steady. As of June 2, there were $595.1 billion in foreign currency reserves, the governor said.

The Monetary Policy Committee (MPC) of the central bank said on Thursday that the policy rate will remain at 6.5 percent. The RBI chose to delay rate increases for the second time in a row. The RBI has maintained its growth prediction for FY24 at 6.5%; it anticipates growth of 8% in Q1, 6.5% in Q2, 6% in Q3, and 5.7% in Q4. “Domestic demand condition remains supportive of growth, while rural demand on revival path,” he said.