India's Forex Reserves Hit Record High Of $363.83 Billion Amid Market Turmoil
India's foreign exchange reserves hit a record high of $363.83 billion as of the week ended June 17, shoring up the country's defences just as investors brace for continued volatility after Britain voted to leave the European Union
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India's foreign exchange reserves hit a record high of $363.83 billion as of the week ended June 17, shoring up the country's defences just as investors brace for continued volatility after Britain voted to leave the European Union.
Analsyts said FX reserves rose mainly on currency valuations.
The Reserve Bank of India has also been steadily building dollars to help meet $20 billion in expected outflows in September tied to maturing dollar deposits - or the foreign currency non-resident (bank) deposits - raised during 2013 when India was in midst of a currency crisis.
The weekly data comes on a day when the Indian rupee fell to as low as 68.22 to the dollar, its lowest since March 1 and not far from a record low of 68.85 hit in August 2013, during the crisis.
The currency however cut some of its losses to end at 67.96/97, compared with its close of 67.25 on Thursday.
"India's strong reserves position is an important buffer against volatility in these uncertain times," said A. Prasanna, economist, ICICI Securities Primary Dealership Ltd in Mumbai.
"However, reserves are likely to see some decline in coming months due to the FCNR redemptions. Over the medium term, we expect reserves to keep expanding, boosted by sustainable inflows such as FDI (foreign direct investment)."
RBI Governor Raghuram Rajan and Finance Minister Arun Jaitely said on Friday India was ready to deal with the aftermath of the Brexit vote, citing its solid economy and planned government reforms.
Rajan also touted the country's FX reserves as key defence against foreign investor selling.