India’s forex reserves see sharpest rise in 2 years
India’s forex reserves saw a huge $15.267 billion spike during the week ended March 7
- NEW DELHI — After the $10 billion forex swap undertaken by the central bank on
February 28, when it bought dollars against rupee to inject liquidity in the
system, the country's foreign exchange reserves saw a huge $15.267 billion
spike during the week ended March 7.
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- The sharp rise during the week was the sharpest jump in over
two years.
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- The forex reserves had increased to an all-time high of
$704.885 billion in September last year 2024.
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- Foreign currency assets, a major component of the reserves,
increased by $13.993 billion to $557.282 billion. Expressed in dollar terms,
the foreign currency assets include the effect of appreciation or depreciation
of non-US units like the euro, pound and yen held in the foreign exchange
reserves.
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- The Special Drawing Rights (SDRs) were up by $212 million to
$18.21 billion. India's reserve position with the IMF was down by $69 million
at $4.148 billion in the week, the RBI data showed.
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- Meanwhile, high frequency indicators point towards a
sequential pick-up in momentum of India's economic activity during the second
half of 2024-25, which is likely to sustain moving forward, according to the
latest RBI monthly bulletin.
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- In a challenging and increasingly uncertain global
environment, the Indian economy is poised to sustain its position as the
fastest growing major economy during 2025-26 as per the IMF and World Bank
estimates of GDP growth of 6.5 per cent and 6.7 per cent, respectively, the
report points out.
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- It further states that the Union Budget 2025-26 prudently
balances fiscal consolidation and growth objectives by continued focus on Capex
alongside measures to boost household incomes and consumption.
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- The effective capital expenditure/GDP ratio is budgeted to
improve to 4.3 per cent in 2025- 26 from 4.1 per cent in 2024-25 (revised
estimate).
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- High frequency indicators show that the economy is on a path
of recovery during H2 of 2024-25 from the loss of momentum witnessed in H1.
