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Wednesday, November 25, 2020

Forex reserves touch record high of $555.1 bn

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

By: ENS Economic Bureau | New Delhi | October 25, 2020 1:22:23 am
n the previous week ended October 9, 2020, the reserves had increased by $5.867 billion to reach $551.505 billion.

The country’s foreign exchange reserves touched a life time high of $555.12 billion after it surged by $3.615 billion in the week ended October 16, according to RBI data.

In the previous week ended October 9, 2020, the reserves had increased by $5.867 billion to reach $551.505 billion.

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

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