India's Forex Reserves Reach Record High of USD 681.688 Billion

India's foreign exchange reserves have reached a new high of USD 681.688 billion, backed by a significant rise in foreign currency and gold reserves. This increase provides a robust buffer against global economic shocks, ensuring stability in domestic economic activities.

India's foreign exchange reserves surged by USD 7.023 billion, hitting a historic peak of USD 681.688 billion during the week ending August 23, according to data from the Reserve Bank of India (RBI). The previous record was USD 674.919 billion.

The upward trend in reserves has been ongoing. In 2024 alone, the reserves have soared by approximately USD 60 billion. These reserves act as a protective buffer for domestic economic activities against global shocks. As per the latest RBI data, India's foreign currency assets (FCA), the chief component of forex reserves, climbed by USD 5.983 billion to USD 597.552 billion.

Gold reserves saw an increase of USD 893 million during the week, reaching a total of USD 60.997 billion. These reserves are now sufficient to cover about a year's worth of projected imports. In 2023, India added about USD 58 billion to its foreign exchange reserves, in contrast to a cumulative decline of USD 71 billion in 2022.

Forex reserves, or foreign exchange reserves, are assets held by a nation's central bank, usually in reserve currencies like the US Dollar, the Euro, Japanese Yen, and Pound Sterling. The RBI monitors forex markets closely, intervening to maintain orderly market conditions and prevent excessive exchange rate volatility. This often involves liquidity management and the sale of dollars to curb steep rupee depreciation. (ANI)

(With inputs from agencies.)