India’s forex reserves surge for 3rd week in row to touch $642.5 billion mark

India’s international trade reserves surged by $6.4 billion to touch a sturdy $642.5 billion for the week ended March 15, the most recent information launched by the RBI on Friday confirmed.

This is the third consecutive week marking a giant leap in the nation’s forex kitty. In the previous week that ended on March 8, the international trade reserves had risen by a whopping $10.47 billion to scale a two-year excessive of $636.1 billion.

Similarly, over the past week of February, the nation’s international trade reserves had shot up by a powerful $6.55 billion to $625.63 billion.

Rising international trade reserves are a constructive for the financial system as they replicate an ample provide of {dollars} that assist to strengthen the rupee.

An enhance in the international trade reserves offers the RBI extra headroom to stabilise the rupee when it turns unstable.

This is as a result of the RBI intervenes in the spot and ahead foreign money markets by releasing extra {dollars} to stop the rupee from going right into a free fall.

Conversely, a declining forex kitty leaves the RBI much less house to intervene in the market to prop up the rupee.

The excellent news on the international trade reserves additionally comes on the again of exports touching an 11-month excessive in February and a decline in the commerce deficit. This signifies a strengthening of the nation’s exterior stability which augurs nicely for the rupee going forward.

(With inputs from IANS)