India’s foreign exchange reserves hit a record level of $359.759 billion as on April 1, data from the Reserve Bank of India (RBI) showed. The previous high was recorded a few weeks back when reserves had touched $355.947 billion.
The central bank data showed that in the week ended April 1, India’s forex reserves rose by a whopping $4.2 billion from the previous week.
With the rupee appreciating 2.85% since the Budget, the RBI seems to have shored up the country’s foreign exchange reserves by a significant amount. It is noteworthy that since February 26, the RBI has topped up forex reserves by almost $13 billion on a net basis.
The rupee started to rise after the Budget where the key highlight was the government’s decision to stick to the fiscal deficit target of 3.5% for fiscal year 2017. Till then, the currency falling against the dollar, with the rupee closing at 68.71 to the dollar on February 25 — hardly 12 paise away from its all-time closing low of 68.825.
As on April 1, foreign currency assets (FCA) which form a key component of the reserves rose by $3.539 billion from the previous week to $335.686 billion.
FCAs are maintained in major currencies such as US dollar, euro, pound sterling, Japanese yen, etc. However, the foreign exchange reserves are denominated and expressed in US dollar only.
Movements in the FCA occur mainly on account of purchase and sale of foreign exchange by the RBI in the foreign exchange market in India, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and revaluation of the assets.
Gold reserves rose by $789.60 million to $20.115 billion. Special drawing rights (SDR) from the International Monetary Fund rose by $13.9 million from the previous week to $1.50 billion.
SDR is an international reserve asset created by the IMF and allocated to its members in proportion of their quota at the multilateral agency. The country’s reserve position in the IMF, however, fell by $143.30 million to $2.456 billion.