India's forex kitty enough to fund over 11 months of imports: RBI chief

• NEW DELHI — India's foreign exchange reserves stood at $691.5 billion, as of May 30, and are sufficient to fund more than 11 months of goods imports and about 96 per cent of external debt outstanding, RBI Governor Sanjay Malhotra said on Friday.
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• For the week ended May 30, the reserves dropped by $1.2 billion to break an 8-week rising trend. India’s foreign exchange reserves had recorded a robust increase of $6.99 billion to $692.72 billion in the preceding week ended May 23.
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• Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in the reserves.
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• External commercial borrowings (ECBs) and non-resident deposits have seen higher net inflows compared to the previous year.

Also read: RBI pegs India’s GDP growth at 6.5 pc for 2025-26

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• The Reserve Bank of India (RBI) Governor said: "Overall, India’s external sector remains resilient as key external sector vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements."
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• The latest RBI data showed that India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $586.167 billion. The RBI releases forex data every Friday.
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• According to RBI data, India’s forex reserves are still quite close to its all-time high of $704.89 billion, reached in September 2024. In 2024, the reserves rose by a little over USD 20 billion.
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• Central banks worldwide are increasingly accumulating gold as a safe-haven asset in their foreign exchange reserves amid uncertainty created by geopolitical tensions. The gold reserves currently amount to $83.582 billion. The share of gold maintained by the RBI in its foreign exchange reserves has almost doubled since 2021.
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• A strengthening of the country’s foreign exchange kitty also helps bolster the rupee vis-a-vis the US dollar.
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• An increase in the foreign exchange reserves reflects strong fundamentals of the economy and gives the RBI more headroom to stabilise the rupee when it turns volatile.
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• A strong forex kitty enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.
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• Meanwhile, India’s external sector has emerged stronger with total exports of goods and services clocking a robust 12.7 per cent growth in April to touch the $73.8 billion mark compared with the corresponding figure of $65.48 billion during the same month last year, despite the global economic uncertainties triggered by the US tariff hikes, according to figures compiled by the Commerce Ministry.