India’s foreign exchange reserves have increased by USD 4.532 billion to USD 588.78 billion for the week ending April 28, according to the Reserve Bank of India. This comes after a drop of USD 2.164 billion in the previous week, where the overall reserves had decreased to USD 584.248 billion.
The country’s foreign exchange reserves had reached an all-time high of USD 645 billion in October 2021 but had been declining due to the central bank’s efforts to defend the rupee amidst global pressures.
The increase in foreign exchange reserves is a positive development for India’s economy as it provides a cushion against external shocks and helps maintain confidence in the domestic currency. The rise in reserves could be attributed to factors such as higher inflows from foreign investors, remittances, and a rise in exports.
India’s foreign exchange reserves consist of foreign currency assets, gold reserves, special drawing rights (SDRs), and India’s reserve position with the International Monetary Fund (IMF). The increase in reserves is driven by the growth of foreign currency assets, which rose by USD 4.287 billion to USD 546.923 billion in the week ended April 28, 2023.
The rise in foreign exchange reserves also reflects India’s strong macroeconomic fundamentals, which have helped attract foreign investments. India’s economy has been on a growth trajectory despite the pandemic, with strong recovery expected in the coming months.
India’s foreign exchange reserves are expected to continue to rise in the coming months as the country’s economic growth picks up momentum. This would provide the necessary cushion against external shocks and help maintain investor confidence in the economy.