IANS | 15 Jun, 2024
India's foreign exchange reserves surged by $4.3 billion during the week
ended June 7 to scale a lifetime high of $655.8 billion, according to the
latest data released by the RBI on Friday.
The country’s forex kitty has broken the earlier record of $651.5
billion, as of May 31, that was announced by RBI Governor Shaktikanta Das on
June 7, and has been rising steadily in recent weeks.
The surge in foreign exchange reserves also came on a day when Commerce
Ministry data show that India’s exports of goods shot up over 9 per cent in
May.
"India’s external sector remains resilient and overall, we remain
confident of meeting our external financing requirements comfortably," Das
said at a press conference after the monetary policy meeting last week.
India, with an expected 15.2 per cent share in world remittances in
2024, also continues to be the largest recipient of remittances globally.
Overall, the current account deficit for 2024-25 is expected to remain well
within its sustainable level, he added.
An increase in the foreign exchange reserves reflects strong
fundamentals of the economy and gives the RBI more headroom to stabilise the
rupee when it turns volatile.
A strong forex kitty enables the RBI to intervene in the spot and
forward currency markets by releasing more dollars to prevent the rupee from
going into a free fall.
Conversely, a declining forex kitty leaves the RBI less space to
intervene in the market to prop up the rupee.
--IANS