Forex reserves touch record high of $555.1 bn

During the latest reporting week, the rise in total reserves was due to a sharp rise in Foreign Currency Assets (FCAs), a major component of the overall reserves. FCA jumped by $3.539 billion to $512.322 billion, the data showed.

Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves were up by $86 million in the reporting week to $36.685 billion.

The special drawing rights with the International Monetary Fund (IMF) remained unchanged at $1.480 billion during the reporting week.

The country’s reserve position with the IMF declined by $11 million to $4.634 billion during the reporting week, as per the data.

Alongside this jump in FDI and FPI inflows, the reserves have been supported by a dip in import bill on account of low crude oil prices, decline in gold and other imports on account of the Covid-19 pandemic.

While rising foreign exchange reservex provide cushion to the economy in terms of covering the import expenditure, it also provides stability to the domestic currency against the dollar.

With PTI