India's Forex Reserves Reach Record $645.58 Billion

By siliconindia  |  Monday, 08 April 2024, 09:51:16 AM IST

India's Forex Reserves Reach Record $645.58 Billion
India's foreign exchange reserves reached a record high of $645.58 billion as of March 29, marking the sixth consecutive week of growth, according to data released by the Reserve Bank of India (RBI) after the Monetary Policy meeting on April 5th. The reserves saw an increase of $2.95 billion in the reporting week, following a total rise of $26.5 billion over the previous five weeks.
The RBI intervenes in the foreign exchange market to curb excess volatility in the rupee. Changes in foreign currency assets are influenced by the appreciation or depreciation of foreign assets held in reserves, including India’s reserve tranche position in the International Monetary Fund. Alongside India's robust economic growth and significant inflows into equity and debt markets, the RBI has been accumulating reserves to fortify against economic uncertainties.
RBI Governor Shaktikanta Das emphasized the central bank's commitment to building substantial forex reserves as a protective measure for future economic challenges. He stated, "It is our prime focus to build a strong umbrella, a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns or when it rains heavily".
During the week under review, the rupee touched a record low of 83.45 against the dollar but saw marginal gains by the end of the week, settling at 83.2950 on Friday, marking a 0.1% increase.
In the first bi-monthly monetary policy announcement of the fiscal year 2024-25, the RBI kept the repo rate unchanged at 6.5%. The Monetary Policy Committee (MPC) voted by a 5:1 majority to maintain key rates at their current levels. Additionally, the central bank retained the policy stance at 'withdrawal of accommodation,' as reiterated by Governor Shaktikanta Das.
These measures indicate the RBI's cautious approach towards balancing economic stability with the need for monetary accommodation amidst evolving global and domestic economic conditions.

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