India’s forex reserves dip by $950.9 mn to $404.2 bn

By: |
Mumbai | Published: August 3, 2018 7:13:21 PM

The foreign exchange reserves declined by USD 950.9 million to USD 404.192 billion in the week to July 27, on account of a fall in the foreign currency assets, the RBI said today.

forex reserves, RBI, indian economy, International Monetary Fund, gold reserves, foreign currency assetsA higher forex kitty is an indicator of the health of the economy as it is the direct cover for imports. (Reuters)

The foreign exchange reserves declined by USD 950.9 million to USD 404.192 billion in the week to July 27, on account of a fall in the foreign currency assets, the RBI said today. In the previous week, the reserves had increased a marginal USD 67.7 million to USD 405.143 billion. A higher forex kitty is an indicator of the health of the economy as it is the direct cover for imports. The longer the import cover, the better the external health of the economy.

At USD 404 billion, the nation can take care of around ten months of imports. Forex reserves had touched a record high of USD 426.028 billion in the week to April 13, 2018. The reserves had crossed the USD 400-billion mark for the first time in the week to September 8, 2017, but have since been fluctuating.

In the week under review, foreign currency assets, a major component of the overall reserves, dipped by USD 1.012
billion to USD 379.037 billion, as per the latest data from the central bank. Expressed in the US dollar terms, foreign currency assets include the effect of appreciation/depreciation of the non-US currencies such as the euro, pound and the yen held in the reserves.

Gold reserves rose by USD 61.1 million to USD 21.201 billion in the reporting week. The special drawing rights with International Monetary Fund (IMF) increased by USD 0.3 million to USD 1.479 billion. The country’s reserve position with the IMF also rose USD 0.5 million to USD 2.474 billion, the apex bank said.

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