Finance
After falling for three weeks in a row, India’s foreign exchange reserves increased by more than $2 billion in the week ending June 24, as the dollar stalled against most major currencies while the rupee fell to new record lows.
According to the latest Reserve Bank of India weekly supplement data, the country’s forex reserves increased by $2.735 billion to $593.323 billion during the week ending June 24, up from $590.588 billion the previous week.
While the rupee hit a series of all-time lows against the dollar that week, the shine of the greenback’s allure was slightly off against its major peers, as investors recalibrated inflation and rate hike risks due to a weakening demand outlook.
This increased the country’s import coverage.
According to the RBI, in the week ending June 24, foreign currency assets (FCAs), which account for a significant portion of total reserves, increased by $2.334 billion to $529.216 billion, while gold reserves increased by $342 million to $40.926 billion.
FCAs, expressed in dollars and take into account the impact of non-US currencies held in foreign exchange reserves, such as the euro, sterling, and yen.
The dollar, on the other hand, has reclaimed its dominance, and the rupee’s plunge to lifetime lows has continued unabated. As a result, the country’s import war chest risks remain skewed to the downside.
Source:tnn
