- MUMBAI — India's
foreign exchange reserves rose for the eighth straight week to touch $688.13
billion as of April 25, according to the latest RBI data released on Friday.
-
- The foreign exchange kitty surged by $1.98 billion during
the week.
-
- The foreign currency component of the reserves increased by
$2.17 billion to $580.66 billion.
-
- The gold reserves component of the forex reserves decreased
by $207 million to $84.37 billion while Special Drawing Rights (SDR) went up by
$21 million to $18.59 billion.
-
- The declining trend in forex reserves of earlier months due
to revaluation and forex market interventions by the RBI to help reduce
volatility in the rupee has now been reversed over the last two months .
Also read: Oil firms slash commercial LPG, jet fuel prices
- Earlier, the country's forex reserves had increased to an
all-time high of $704.885 billion in September 2024.
-
- Any strengthening of the country's foreign exchange kitty
also helps bolster the rupee vis-a-vis the US dollar which is good for the
economy.
-
- An increase in the foreign exchange reserves reflects the
strong fundamentals of the economy and gives the RBI more headroom to stabilise
the rupee when it turns volatile.
-
- 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.
-
- Conversely, a declining forex kitty leaves the RBI less
space to intervene in the market to prop up the rupee.
-
- Meanwhile, India’s external sector has emerged stronger with
total exports rising to an all-time high of $824.9 billion in the financial
year 2024–25 despite geopolitical uncertainties and a slowdown in world trade.
