India's forex reserves reach record high of $642.5 billion RBI data

India's forex reserves rose by $6.396 billion to $642.492 billion for the week ended March 15 marking a fourth consecutive weekly increase, the RBI data showed on Friday.Buoyed by robust economic growth projections and substantial overseas investments, the reserves provide a buffer against currency fluctuations and cover more than 11 months of imports.
In the previous reporting week, the overall reserves had risen by $10.47 billion to $636.095 billion,stated report.In October 2021, the country’s forex kitty had reached an all-time high of $ 645 billion.
The Indian economy is seen growing at 7.6% this year, one of the fastest among major global economies. This helped draw $20.7 billion in overseas equity flows in 2023 and $1.85 billion so far this year. In addition, India's inclusion on global bond indexes has drawn over $10 billion since late September.
The Reserve Bank of India (RBI) has chosen to absorb most of these flows to avoid a sharp appreciation in the rupee, adding to its reserves, said experts.The rise in FX reserves was due to maturity of the RBI's $5 billion sell buy swap," IDFC FIRST Bank economist Gaura Sen Gupta quoted as saying. "Moreover, RBI has likely made additional dollar purchase during that week to the tune of about $3 billion",she added.

(Ira Singh, Asstt Editor, Gandhinagar)