After registering a massive surge of $8.22 billion in the week ended on June 5, India’s foreign reserves crossed the $500 billion mark on Friday.
As per weekly statistical data released by the Reserve Bank of India (RBI), the overall forex reserves increased to $501.703 billion on June 5 from $493.480 billion reported for the week ended on May 29.
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India’s forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs), and India’s reserve position with the International Monetary Fund (IMF).
The FCAs, the largest component of the forex reserves, increased by $8.422 billion to $463.630 billion, said reports.
However, the value of India’s gold reserves decreased by $329 million to $32.352 billion.
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While the SDR value climbed by $10 million to $1.442 billion, the reserve position of the country with the IMF rose by $120 million to $4.278 billion.
“India’s Foreign Exchange Reserves hit USD501.7 billion. As I have been saying in recent weeks, demand suppression (such a lockdown) would push the INR to appreciate after an initial capital outflow,” said Sanjeev Sanyal, the principal economic advisor in the Ministry of Finance, in a tweet.
“Now, as we open the economy to remove demand suppression, and push up credit growth, we will both revive imports and foreign capital inflows. The point is that demand identities imply macro-dynamics that is quite different from what naive forecasters suggest,” Sanyal added.