The country's foreign exchange reserves had declined by $1.71 billion to $652 billion in the week ended June 28, but have bounced back to resume last week's rising trend.
The increase in foreign exchange reserves reflects the strong fundamentals of the economy and gives more scope to the RBI to stabilize the rupee if it becomes volatile.
A strong foreign exchange reserves enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from falling heavily.
Conversely, a decline in foreign exchange reserves leaves the RBI with less room to intervene in the market to support the rupee.
RBI Governor Shaktikanta Das recently said that India's external sector remains resilient and overall the central bank is confident of meeting the country's external financing needs comfortably.
India's current account deficit narrowed to US$23.2 billion (0.7 per cent of GDP) during 2023-24 from US$67.0 billion (2.0 per cent of GDP) during the previous year, led by a lower goods trade deficit which Reflects strong external balance. Situation according to RBI data released on June 24 this year.
RBI data also showed that India's current account balance recorded a surplus of US$ 5.7 billion (0.6 per cent of GDP) in the January-March quarter of 2023-24, while the deficit was at US$ 8.7 billion (0.6 per cent of GDP). Was 1.0 percent). ) in the preceding October-December quarter of 2023-24 and US$ 1.3 billion (0.2 per cent of GDP) in the fourth quarter of 2022-23, reflecting an improvement in the country's macroeconomic situation.
The increase in foreign exchange reserves reflects the strong fundamentals of the economy and gives more scope to the RBI to stabilize the rupee if it becomes volatile.
A strong foreign exchange reserves enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from falling heavily.
Conversely, a decline in foreign exchange reserves leaves the RBI with less room to intervene in the market to support the rupee.
RBI Governor Shaktikanta Das recently said that India's external sector remains resilient and overall the central bank is confident of meeting the country's external financing needs comfortably.
India's current account deficit narrowed to US$23.2 billion (0.7 per cent of GDP) during 2023-24 from US$67.0 billion (2.0 per cent of GDP) during the previous year, led by a lower goods trade deficit which Reflects strong external balance. Situation according to RBI data released on June 24 this year.
RBI data also showed that India's current account balance recorded a surplus of US$ 5.7 billion (0.6 per cent of GDP) in the January-March quarter of 2023-24, while the deficit was at US$ 8.7 billion (0.6 per cent of GDP). Was 1.0 percent). ) in the preceding October-December quarter of 2023-24 and US$ 1.3 billion (0.2 per cent of GDP) in the fourth quarter of 2022-23, reflecting an improvement in the country's macroeconomic situation.
