Fresh all-time high forex to further boost country’s external sector resilience

New Delhi, Sep 14
As India's forex reserves jumped $5.2 billion to a fresh all-time high of $689.24 billion, industry experts said on Saturday that this will create external sector resilience and boost economy across sectors.

According to the weekly data by Reserve Bank of India (RBI), foreign currency assets (FCAs) grew by $5.10 billion to $604.1 billion (week ended September 6).

The data showed a $129 million increase in Gold reserves to $61.988 billion, compared to $61.859 billion in the August end. Gold is the second largest contributor to India's forex reserve.

The Special Drawing Rights (SDRs) showed an increase of $4 million to $18.472 billion, compared to its previous level of $18.468 billion in August end, according to the RBI data.

The country’s reserve position with the International Monetary Fund (IMF) went up $9 million to $4.631 billion.

The Central Bank, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

Moving ahead, the country's substantial foreign exchange reserves will provide the RBI greater flexibility in monetary policy and currency management.

With the support of prudent policy initiatives and a vigilant monetary policy stance, the forex has reached the new all-time high record amid growing geopolitical uncertainties, according to industry experts.

Going ahead, coupled with RBI’s the robust policies and continued handholding by the government, India’s strong forex will boost economic growth trajectory by strengthening its position internationally, drawing in foreign investments, and promoting domestic trade and industry, he mentioned.

The country is also the fourth largest foreign exchange reserve holder in the world, along with one of the largest FDI recipients in the world. The country has become the favourite destination for investment globally which is creating this rebounding effect for the country.