India’s forex reserves jump $1.49 billion to $695.11 billion

India’s foreign exchange reserves increased by $1.49 billion, reaching $695.11 billion as of the week ending August 15, according to Reserve Bank of India (RBI) data released on Friday.

This growth follows a significant $4.75 billion rise to $693.62 billion recorded during the prior week ending August 8, underscoring the nation’s stable external financial position.

Higher foreign exchange reserves empower the RBI to stabilize the rupee against the US dollar by intervening in currency markets. Well-maintained reserves help mitigate excessive volatility and prevent sharp depreciations of the rupee through strategic dollar releases.

During the August 15 reporting week, foreign currency assets—the largest reserve component—climbed by $1.92 billion to $585.9 billion. These assets account for fluctuations in the value of non-US currencies like the euro, pound, and yen held within the reserves.

Gold reserves stood at $85.67 billion, reflecting a global trend where central banks bolster gold holdings as a safe-haven asset amid geopolitical uncertainties. Notably, the RBI’s gold reserves have nearly doubled since 2021.

Special drawing rights (SDRs) remained stable at $18.78 billion. Current reserve levels can cover over 11 months of merchandise imports and nearly 96% of external debt obligations, as noted by authorities.

India’s robust external sector performance aligns with positive trade data. Merchandise exports grew by 7.29% year-on-year to $37.24 billion in July, up from $34.71 billion in the same month last year. Key export drivers included engineering goods, electronics, pharmaceuticals, chemicals, and gems/jewelry.

Commerce Secretary Sunil Barthwal emphasized India’s resilient export growth despite global economic headwinds, noting that service and merchandise exports continue to outpace worldwide trends.

(With inputs from IANS)