India becomes 4th Nation to cross $700 billion in forex reserves

Ira Singh
Khabar Khabaron Ki,06 Oct’24

India has become the fourth economy in the world to surpass 700 billion US dollars in foreign reserves, joining China, Japan, and Switzerland. India’s foreign exchange reserves surged by 12.588 billion dollars to touch a new all-time high of 704.885 billion dollars for the week ending September 27. In the previous week ended September 20, the forex reserves jumped by 2.8 billion to 692.3 dollars. The sharp increase in forex reserves strengthened India’s ability to cushion against global economic uncertainties and provides greater stability to its currency in the face of volatile international markets. According to the latest RBI data, India’s gold reserves rose 2.184 billion to 65.796 billion dollars. The special drawing rights with the International Monetary Fund increased by 8 million to 18.547 billion dollars.

This growth in the reserves is attributed to multiple factors including $30 billion in foreign inflows so far this year, led mainly by investments in local bonds after the inclusion in an important J.P. Morgan index.India’s forex reserves may rise to as much as $745 billion by March 2026, Bank of America had forecasted earlier.The buildup in reserves is supported by a balance-of-payments surplus, aided by a narrower current-account deficit.

Meanwhile, in a historic achievement, India’s foreign exchange reserves surpassed the $700 billion mark for the first time in September 2024, according to data released by the Reserve Bank of India (RBI) on Friday. The reserves, currently standing at $704.88 billion, saw a significant weekly increase of $12.58 billion and have grown by $58.47 billion since March 2024.