New Delhi, May 31 India’s foreign exchange reserves recorded a spectacular rise of $6.99 billion to $692.72 billion during the week ended May 23, according to the latest weekly data from the RBI.
According to the data, foreign currency assets, a major component of the foreign exchange reserves, rose by $4.52 billion to $586.17 billion.
According to RBI data, the value of the gold reserves component also increased tremendously during the week, rising by $2.37 billion to $83.58 billion.
Special Drawing Rights (SDRs) rose by $81 million to $18.571 billion.
According to the data, India’s reserve position with the IMF rose by $30 million to $4.401 billion during the week.
The country’s foreign exchange reserves fell by $4.89 billion to $685.73 billion in the previous week ended May 16.
However, in the week ended May 9, the foreign exchange reserves had increased by $4.5 billion to $690.62 billion.
Any strengthening of the country’s foreign exchange reserves strengthens the rupee against the US dollar.
An increase in foreign exchange reserves reflects the strong fundamentals of the economy and gives the RBI more scope to stabilize the rupee when it becomes volatile.
Strong foreign exchange reserves enable the RBI to intervene in the spot and forward currency markets by issuing more dollars to prevent the rupee from falling.
Conversely, falling foreign exchange reserves give the RBI less room to intervene in the market to support the rupee.
Meanwhile, India’s external sector has emerged stronger, according to commerce ministry data. Total exports of goods and services recorded a robust growth of 12.7 per cent to $73.8 billion in April, as against $65.48 billion in the same month last year.
The country’s merchandise exports grew 9.03 per cent to $38.49 billion in the month, with high-value electronics and engineering goods recording the highest growth, reflecting the country’s growing manufacturing base.
Exports of electronic goods rose 39.51 per cent to $3.69 billion in April from $2.65 billion in the same month last year.
Exports of engineering goods rose 11.28 per cent to $9.51 billion in the month, as against $8.55 billion in April last year.
Jewellery exports rose 10.74 per cent to $2.5 billion from $2.26 billion.
