India's Forex Reserves Near Record High, Insight from RBI

India's foreign exchange reserves witnessed a significant increase, rising by USD 5.171 billion to USD 696.656 billion in the week ending June 6, according to the Reserve Bank of India's recent data release. This enhancement brings the reserves closer to the all-time high of USD 704.89 billion, recorded in September 2024.

RBI Governor Sanjay Malhotra stated that the reserves are sufficiently large to finance the nation's imports for nearly 11 months and cover about 96% of India's external debt. The growth in forex reserves has been supported by a boost in foreign currency assets, which comprise the largest segment of these reserves, estimated at USD 587.687 billion.

Additionally, as central banks globally boost their gold holdings, India's gold reserves have escalated to USD 85.888 billion. Since 2021, the share of gold in India's reserves has doubled, showcasing a strategic shift towards safe-haven assets amidst global economic fluctuations. Furthermore, the RBI's strategic interventions in currency markets have been pivotal in robust reserve management.

(With inputs from agencies.)