India’s foreign exchange reserves saw a rise of $963 million, reaching $672.587 billion by the week ending June 19, as per data from the Reserve Bank of India. The value of the country’s gold reserves also surged by $4.11 billion to $107.930 billion during the same period.
On the flip side, India’s holdings of Special Drawing Rights (SDRs) with the International Monetary Fund decreased by $52 million to $18.647 billion. Despite a recent decline, India’s reserves continue to rank among the highest globally, albeit below the peak of $728.494 billion recorded in February.
The recent volatility in reserves was influenced by conflicts in the Middle East, leading the RBI to intervene by selling dollars to stabilize the rupee. Furthermore, the RBI provided clarifications on operational aspects of Foreign Currency Non-Resident Bank (FCNR-B) deposits, allowing banks to extend loans to account holders and mark a lien on such deposits for operational flexibility.
The central bank also permitted banks to engage in foreign exchange swaps with tenors of less than three years, provided they mobilized fresh eligible FCNR-B deposits with a minimum original maturity of three years. This move, along with higher deposit rates and RBI’s support, is expected to attract more non-resident inflows in the upcoming weeks.
