New Delhi: India has become the fourth economy in the world to surpass $700 billion dollars in foreign reserves. With this achievement, India joins China, Japan, and Switzerland as the fourth economy worldwide to cross $700 billion in forex reserves.
The forex reserves surged by $12.588 billion, reaching a new all-time high of $704.885 billion for the week ending 27 September. This is the largest weekly increase since mid-July 2023. This is for sixth week in a row that the forex reserves is gaining.
In the previous week ended on September 20, the forex reserves had increased by $2.838 billion to $692.296 billion. India’s forex reserves jumped $223 million to a fresh all-time high of $689.458 billion for the week ended September 13. The forex kitty had jumped by $5.248 billion to a record $689.235 billion for the previous reporting week.
In nearly a month between August 9 and September 13, India’s foreign exchange rose by 2.88 per cent from $670.119 billion to $689.458.So far in 2024, India’s forex reserves have surged by $87.6 billion, significantly exceeding the nearly $62 billion increase observed over the whole of last year.
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As per data, India’s reserves first crossed $100 billion in December 2003, taking more than three years to add the next $100 billion. However, the third $100 billion (from $200 billion to $300 billion) was achieved in less than one year, with reserves surpassing $300 billion on February 29, 2008. The increase from $200 billion to $300 billion was the fastest, occurring in about ten months, while it took more than nine years to rise from $300 billion to $400 billion.
Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.
The foreign exchange reserves of the country comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the country’s reserve position with the International Monetary Fund (IMF). FCA is the largest component of the forex reserves. It includes the effect of appreciation or depreciation of non-US currencies like the euro, pound, and yen held in the foreign exchange reserves.
India’s gold reserves rose $2.184 billion to $65.796 billion during the week ended September 27. Foreign currency assets increased by $10.468 billion to $616.154 billion. The special drawing rights (SDRs) increased by $8 million to $18.547 billion. However, India’s reserve position with the IMF fell by $71 million to $4.387 billion in the reporting week.
Foreign investors have pumped in Rs 2.34 lakh crore into the country’s debt and equity markets so far this year, according to data from the National Securities Depository Ltd. The month of September has seen Rs 93,538 crore make its way into Indian bonds and equities.
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