India’s forex reserves surge $4.3 billion to hit new lifetime high of $55.8 billion

NEW DELHI: India’s foreign exchange reserves rose for the second consecutive week, reaching a new all-time high of $ 655.817 billion for the week ended June 7, as reported by the Reserve Bank of India (RBI) on Friday. The reserves rose by $4.3 billion, bringing the total to $ 651.51 billion.
The previous record for the reserves, which serve as a crucial buffer against external sector disturbances, was $ 648.87 billion on May 10.In recent weeks, the reserves have seen significant increase.
For the week ending June 7, foreign currency assets, the largest component of the reserves, rose by $ 3.773 billion to $ 576.337 billion, according to the data released on Friday.
Expressed in dollar terms, foreign currency assets reflect the impact of the appreciation or depreciation of non-US currencies such as the euro, pound, and yen held in the reserves.
Gold reserves increased by $ 481 million to $ 56.982 billion during the week, the RBI reported.
An increase in the foreign exchange reserves reflects strong fundamentals of the economy and gives the RBI more headroom to stabilise the rupee when it turns volatile.
Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.