Forex Reserves at fresh all-time high of $393 billion

The country’s foreign exchange reserves are within a kissing distance from the magical figure number of $400 billion, shows the latest data released by the Reserve Bank of India (RBI) on Friday. Foreign exchange reserve have touched a new life-time high of $393.448 billion after rising by $581.1 million in the week to August 4 on account of increase in foreign currency assets (FCAs). In the previous week, the reserves had surged by $1.536 billion to $392.867 billion.

FCAs, which account for 94 per cent of the reserves, rose by $964.4 million to $369.723 billion, the data showed. FCAs include effect of appreciation or depreciation of non-US currencies such as the euro, the pound and the yen held in the reserves. After remaining stable for past few weeks, the gold reserves declined by $405.7 million to $19.943 billion.The special drawing rights with the International Monetary Fund (IMF) went up by $8.9 million to $1.504 billion. The country’s reserve position with the IMF rose by $13.5 million to $2.277 billion, the apex bank said.

The Economic Survey volume 2 released on Friday said that higher foreign exchange reserves has helped most reserve-based external sector vulnerability indicators improve. Extensive forward market intervention (which is effectively sterilised) reflected the RBI’s attempt to manage excess liquidity in the wake of demonetisation.