India’s Forex Reserves Reach Record High of $360 billion
India’s foreign exchange reserves jumped $4.2 billion to touch a record high of $360 billion for the week ended April 1, 2016, said the Reserve Bank of India in its weekly statistical report. “The Reserve Bank of India has been buying dollars taking advantage of the fact that the rupee has appreciated almost 3%, giving an opportunity for the central bank to buy cheaper dollars in the currency market,” said Abhishek Goenka, founder of foreign risk solutions firm IFA Global.
The Indian rupee has been appreciating on the back of improved dollar inflows into the country into both the equity and debt markets. Over the month of March, .₹ 21,143 crore came into the equity markets. In the first week of April, .₹ 7,625 crore was pumped into the debt and equity markets by foreign institutional investors.
High dollar reserves improve import payment capabilities of the country, allow the Reserve Bank of India to intervene in cases of currency rundown and also facilitate a better global rating.