India's forex reserves rise by $2.56 bn to hit all-time high of $581 bn

At a time when the economy is under stress due to coronavirus pandemic, India's foreign exchange (forex) reserves have been rising at a very fast pace and have touched a new high. As per the Reserve Bank of India's weekly data, the country's foreign exchange reserves rose by $2.56 billion in the week ended December 18 to hit fresh all-time high of $581.131 billion, making it the fifth largest holder of reserves in the world. In the previous week, the reserves had fallen by $778 million to $578.568 billion.

The increase in forex reserves was attributed to a rise in foreign currency assets (FCAs), largest component of the overall reserves. FCAs, gold reserves, special drawing rights (SDRs), and the country`s reserve position with the International Monetary Fund (IMF) are the component of forex reserves.

FCAs soared by $1.382 billion to $537.727 billion, the Reserve Bank of India's (RBI) weekly data showed. The foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

On the weekly basis, the gold reserves rose by $1.008 billion to $37.02 billion, the data showed.

The RBI data showed that the special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $12 million to $1.515 billion. India's reserve position with the IMF also rose by $160 million to $4.870 billion in  the week ended December 18.

By Chitranjan Kumar

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