India’s foreign exchange reserves jumped by almost $10 billion to a six-month high of $716.9 billion for the week ending Aug 14, helped by sustained dollar inflows amid efforts by the Reserve Bank of India to bolster the country’s external finances, Reuters reports
The reserves increased by $9.9 billion from the previous week, with foreign currency assets rising $7.2 billion and the value of gold holdings increasing by $2.7 billion, data released by the RBI showed.
India’s reserves have risen for seven consecutive weeks, adding about $50 billion during the period and bringing them within reach of the record $728.5 billion reached in February.
The increase followed RBI measures introduced in June to attract foreign currency, including discounted hedging facilities for overseas borrowing and a no-cost hedging facility for banks raising foreign exchange deposits.
The RBI said it had received nearly $57 billion in inflows through the measures by Aug. 13, largely through foreign currency deposits. The strong response prompted the central bank to bring forward the closure of its deposit hedging facility to Aug. 31.
The buildup gives the RBI a larger buffer to manage external shocks and intervene in currency markets. However, the central bank has also been actively intervening to contain volatility in the rupee, which may have offset some of the dollar inflows.
India’s foreign exchange reserves jumped by almost $10 billion to a six-month high of $716.9 billion for the week ending Aug 14, helped by sustained dollar inflows amid efforts by the Reserve Bank of India to bolster the country’s external finances, Reuters reports
The reserves increased by $9.9 billion from the previous week, with foreign currency assets rising $7.2 billion and the value of gold holdings increasing by $2.7 billion, data released by the RBI showed.
India’s reserves have risen for seven consecutive weeks, adding about $50 billion during the period and bringing them within reach of the record $728.5 billion reached in February.
The increase followed RBI measures introduced in June to attract foreign currency, including discounted hedging facilities for overseas borrowing and a no-cost hedging facility for banks raising foreign exchange deposits.
The RBI said it had received nearly $57 billion in inflows through the measures by Aug. 13, largely through foreign currency deposits. The strong response prompted the central bank to bring forward the closure of its deposit hedging facility to Aug. 31.
The buildup gives the RBI a larger buffer to manage external shocks and intervene in currency markets. However, the central bank has also been actively intervening to contain volatility in the rupee, which may have offset some of the dollar inflows.
