At a time when the economy is under stress due to the coronavirus pandemic, India’s foreign exchange (forex) reserves have been rising at a very fast pace and have touched a new high. The country’s foreign exchange reserves surged by $2.563 billion to touch a record high of $581.131 billion, making it the fifth-largest holder of reserves in the world. In the previous week, the reserves had fallen by $778 million to $578.568 billion, Reserve Bank of India (RBI) data showed.
The increase in forex reserves was attributed to a rise in foreign currency assets (FCAs), the largest component of the overall reserves. FCAs, gold reserves, special drawing rights (SDRs), and the country’s reserve position with the International Monetary Fund (IMF) are the components of forex reserves.
In the reporting week, the increase in reserves was due to a rise in foreign currency assets (FCAs), a major component of the overall reserves.
FCAs rose by $1.382 billion to $537.727 billion, the RBI weekly data showed.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
The gold reserves increased by $1.008 billion in the reporting week to $37.020 billion in the week ended December 18, the data showed.
The special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $12 million to $1.515 billion.
The country’s reserve position with the IMF also rose by $160 million to $4.870 billion.