India's Foreign Exchange Reserves Increased by $ 4.75 billion to $ 693.6 billion

Mumbai (The Uttam Hindu): India's foreign exchange reserves rose by $4.75 billion to $693.62 billion in the week ended August 8, according to data released by the Reserve Bank of India on Friday. The good performance of foreign exchange reserves reflects the strength of the country's macroeconomic fundamentals and gives the RBI more room to strengthen the rupee against the US dollar.

Strong foreign exchange reserves enable the RBI to intervene in the spot and futures currency markets by releasing more dollars to prevent the rupee from falling and reduce its volatility. In the week ended August 8, the value of foreign currency assets, a major component of the forex reserves, rose by $2.84 billion to $583.98 billion. Foreign currency assets include the effect of appreciation or depreciation in dollar terms of non-US units such as the euro, pound and yen held in the forex reserves.

The value of gold reserves, one of the main components of foreign exchange reserves, rose by $2.16 billion to $86.16 billion during the week. Amid uncertainty created by geopolitical tensions, central banks around the world are rapidly increasing gold reserves as a safe investment in their foreign exchange reserves. The Reserve Bank of India has almost doubled its share of gold in its foreign exchange reserves since 2021. The value of special drawing rights in foreign exchange reserves was $18.74 billion during the review period.

RBI Governor Sanjay Malhotra recently said that India's foreign exchange reserves are sufficient to fund more than 11 months of merchandise imports and about 96 percent of outstanding foreign loans. Earlier, according to official data released on Thursday, India's merchandise exports grew 7.29 percent to $ 37.24 billion in July this year, compared to $ 34.71 billion in the same month last year.

Commerce Secretary Sunil Barthwal said, "Despite the uncertain global policy environment, India's services and merchandise exports have grown at a rapid pace in July and FY26 so far and have far outpaced global export growth."