India's foreign exchange retains reach 11-month high
By siliconindia | Monday, May 15, 2023
India's currency reserves have risen to an 11-month high, the latest Reserve Bank of India data shows. India's import cover increased by about $7.2 billion to nearly $596 billion in the week that ended on May 5.
In the week that ended on April 28, India's forex reserves stood at a 10-month high of $588.78 billion.
The latest data shows India's forex reserves are not far from the record high of $645 billion, which was reach in October 2021.
This is good news for the country, as India's reserves had declined significantly after the Russia-Ukraine war. The Reserve Bank of India has been deploying its forex kitty to defend the rupee when investors sheltered into the U.S. dollar.
In the April 28-May 5 week, the foreign currency assets, a major component of the reserves, increased by nearly $6.536 billion to reach $526.021 billion. The foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the reserves.
A healthy forex currency reserve helps India pay for its imports and keep the rupee stable.
Meanwhile, Gold reserves increased by USD 659 million to USD 46.315 billion, while the Special Drawing Rights (SDRs) came down by $19 million to $18.447 billion. India's reserve position with the International Monetary Fund (IMF) rose by $20 million to $5.192 billion in the week that ended on May 5.
Interestingly, India's growing forex reserves are in contrast to Sri Lanka, Pakistan and Bangladesh, where declining forex reserves are making import payments difficult. This clearly shows India's prominence and a growing disparity in Asia.
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