India’s foreign exchange reserves (forex) have shown remarkable growth, reaching an all-time high of $645.583 billion for the week ended March 29, 2023, as reported by the Reserve Bank of India (RBI). This impressive increase of $2.951 billion marks the sixth consecutive week of growth, following a total rise of $26.5 billion in the previous five weeks.
The country’s forex reserves had previously reached a record high of $642.453 billion in September 2021. However, the reserves faced challenges as the central bank utilized them to stabilize the rupee amid global pressures. Despite these obstacles, India’s economy has demonstrated resilience, with the RBI’s intervention and the appreciation of non-US assets contributing to the recent growth in foreign currency assets (FCA), which increased by $2.354 billion to $570.618 billion.
Furthermore, gold reserves increased significantly by $673 million, reaching $52.16 billion during the week. While the Special Drawing Rights (SDRs) and India’s reserve position with the International Monetary Fund (IMF) experienced minor declines, the overall trend remains positive.
Despite India’s strong growth and investments in equity and debt markets, the RBI’s proactive approach in absorbing inflows to build reserves highlights the central bank’s commitment to maintaining economic stability. This is evident from the rupee’s recent performance, which saw minor weekly gains despite hitting a record low against the US dollar.
The RBI Governor’s optimistic statements regarding the robustness of the Indian economy have further bolstered confidence in the rupee’s resilience.
