Saturday August 06, 2022

India’s forex reserves up by $2.4 billion

India’s forex reserves up by $2.4 billion

A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad, India. Reuters

India’s forex reserves rose $2.4 billion during the week ending July 29 after falling for the four consecutive weeks. The rise was seen on back of positive inflows by the foreign investors in the Indian equity market.

The country’s foreign exchange reserves rose by $2.4 billion to $573.8 billion during the week ending June 29, according to the Reserve Bank of India’s (RBI) weekly supplementary statistical data.

“India’s foreign exchange reserves, supplemented by net forward assets, provide insurance against global spillovers. Our umbrella remains strong,” RBI Governor Shaktikanta Das said.

“The Reserve Bank has also used its foreign exchange reserves accumulated over the years to curb volatility in the exchange rate,” he added.

During the current financial year (up to Aug.4), the US dollar index (DXY) has appreciated by 8.0 per cent against a basket of major currencies. In this milieu, the Indian rupee has moved in a relatively orderly fashion depreciating by 4.7 per cent against the US dollar during the same period, faring much better than several reserve currencies as well as many of its EME and Asian peers.

The depreciation of the Indian rupee is more on account of the appreciation of US dollar rather than weakness in macroeconomic fundamentals of the Indian economy. “Market interventions by the RBI have helped in containing volatility and ensuring orderly movement of the rupee. We remain watchful and focused on maintaining stability of the Indian rupee,” Das added.

In July, foreign investors turned net buyers in the Indian equities nearly after 10 months, with an investment of around Rs4,980 crore in the Indian equity markets.

This comes heavy sell-off by these entities of around Rs 50,203 crore.

According to the data NSDL data, investment of foreign investors in July month stood at Rs4,989 crore, as compared to over Rs50,000 crore outflows in June, Rs39,993 crore in May and Rs17,144 crore in April.


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