India's Forex Reserves Show Resilience Amid Global Economic Pressures

India's foreign exchange reserves declined by USD 1.237 billion, settling at USD 691.485 billion in the week ending May 30, as disclosed by the Reserve Bank of India (RBI) on Friday. RBI Governor Sanjay Malhotra emphasized that the forex reserves are adequate to cover 11 months of imports and approximately 96% of the nation's external debt. This follows the latest decisions from the Monetary Policy Committee.

Despite this week's slight reduction, the reserves remain close to the historical peak of USD 704.89 billion recorded in September 2024. Foreign currency assets, the most significant component of the forex reserves, measure at USD 584.215 billion. As global central banks boost their gold holdings, India's gold reserves are currently valued at USD 84.305 billion, having nearly doubled since 2021.

In 2023, India's reserves saw an increase of around USD 58 billion, contrasting with a significant contraction in 2022, where reserves fell by USD 71 billion. In 2024, the reserves climbed by over USD 20 billion, reflecting the RBI's strategic interventions in foreign exchange markets to stabilize the Rupee by managing liquidity and preventing excessive depreciation.

(With inputs from agencies.)