India’s forex reserves jump $8.22 billion; cross half-a-trillion mark for first time

In the previous week ended May 29, the forex reserves had increased by USD 3.44 billion to USD 493.48 billion.

India Forex reserves: The reserves rose to USD 501.70 billion in the reporting week helped by a whopping rise in foreign currency assets (FCA). Photographer: Dhiraj Singh/Bloomberg

India’s foreign exchange reserves crossed the half-a-trillion mark for the first time after it surged by a massive USD 8.22 billion in the week ended June 5, as per the latest data from the RBI.

The reserves rose to USD 501.70 billion in the reporting week helped by a whopping rise in foreign currency assets (FCA).

In the previous week that ended May 29, the reserves had increased by USD 3.44 billion to USD 493.48 billion.

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In the week ended June 5, FCA, which is a major component of the overall reserves, rose USD 8.42 billion to USD 463.63 billion.

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

The gold reserves declined by USD 329 million to USD 32.352 billion in the reporting week, the Reserve Bank of India (RBI) data showed.

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In the reporting week, the special drawing rights with the International Monetary Fund (IMF) were up by USD 10 million to USD 1.44 billion.

The country’s reserve position with the IMF also rose USD 120 million to USD 4.28 billion during the reporting week, the data showed.

Since September 20, 2019, when Finance Minister Nirmala Sitharaman announced a cut in corporate tax rates, the forex reserves have been rising week-on-week and shot up to $487.23 billion in the week ended March 6, 2020. A sharp decline in global crude oil prices subsequently were a blessing in disguise for India during this period.