India’s Forex Reserves Jump By $100 Billion In Four Years
Foreign exchange reserves rose to $386 billion as of June 30.
India’s foreign exchange reserves hit another record high in June, climbing to over $386 billion, according to Reserve Bank of India data released on Friday. For the week ended June 30, reserves rose by $4 billion as foreign inflows into the debt market remained strong.
Over a four year period since 2013, India has now added $100 billion to its reserves kitty, giving considerable comfort to the central bank in defending the rupee, should it need to.
The Indian economy faced a currency crisis last in the July-September 2013 period when the Rupee fell to a record low of 68.85 against the US dollar. The RBI stepped in to defend the currency which pushed down reserves to $274 billion.
Since then, the scenario has changed considerably.
In 2013, the RBI raised foreign currency non resident deposits to build forex reserves and bring some confidence back to the forex markets. Subsequently, as the mood turned, India saw strong inflows into the debt and equity markets. The central bank absorbed a part of these flows to prevent excessive appreciation in the India rupee, leading to a build up of reserves.
India’s forex reserves are now enough to cover roughly eleven months of imports.
