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Tag: forex kitty

  • India’s Forex Kitty Surges To New Lifetime High Of $655.8 Billion | Economy News

    New Delhi: India’s foreign exchange reserves surged by $4.3 billion during the week ended June 7 to scale a lifetime high of $655.8 billion, according to the latest data released by the RBI on Friday. The country’s forex kitty has broken the earlier record of $651.5 billion, as of May 31, that was announced by RBI Governor Shaktikanta Das on June 7, and has been rising steadily in recent weeks.

    The surge in foreign exchange reserves also came on a day when Commerce Ministry data show that India’s exports of goods shot up over 9 per cent in May. “India’s external sector remains resilient and overall, we remain confident of meeting our external financing requirements comfortably,” Das said at a press conference after the monetary policy meeting last week. (Also Read: Advance Tax First Instalment Payment: Find Out Who Has To Pay, Consequences Of Missing Payment)

    India, with an expected 15.2 per cent share in world remittances in 2024, also continues to be the largest recipient of remittances globally. Overall, the current account deficit for 2024-25 is expected to remain well within its sustainable level, he added. (Also Read: EPF Withdrawal Update: EPFO ​​Discontinues Covid-19 Advance Facility – Check Details)

    An increase in the foreign exchange reserves reflects strong fundamentals of the economy and gives the RBI more headroom to stabilise the rupee when it turns volatile. A strong forex kitty enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall. Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.

  • Forex reserves slide for fourth straight week amid decline in foreign money belongings

    Recording a fall of $160 million, the nation’s foreign exchange reserves declined to $635.667 billion through the week to December 17, based on information from the RBI.
    For the earlier week ended December 10, the overseas change — or foreign exchange — reserves had fallen by $77 million to $635.828 billion. The foreign exchange kitty had reached an all-time excessive of $642.453 billion through the week ended September 3, 2021.
    For the reporting week ended December 17, the decline was primarily attributable to a fall in overseas foreign money belongings (FCAs), an important part of the general reserves. This is the fourth straight week of fall within the reserves.
    FCAs tumbled by $645 million to $572.216 billion, weekly information launched by the Reserve Bank of India (RBI) confirmed on Friday.
    Expressed in greenback phrases, the FCA embrace the impact of appreciation or depreciation of non-US items such because the euro, pound sterling and Japanese yen held within the overseas change reserves.
    Gold reserves rose by $475 million to $39.183 billion within the reporting week.
    The particular drawing rights (SDRs) with the International Monetary Fund (IMF) remained unchanged at $19.089 billion.
    The nation’s reserve place with the IMF elevated by $9 million to $5.179 billion within the reporting week, as per the information.
    Falling foreign exchange reserves might trigger points for the federal government and the Reserve Bank in managing the nation’s exterior and inner monetary points.
    Higher reserves are a giant cushion within the occasion of any disaster on the financial entrance and sufficient to cowl the import invoice of the nation for a yr. They additionally strengthen the rupee towards the US greenback.

    An enhance in reserves additionally present a stage of confidence to markets {that a} nation can meet its exterior obligations, exhibit the backing of home foreign money by exterior belongings, help the federal government in assembly its foreign exchange wants and exterior debt obligations, and keep a reserve for nationwide disasters or emergencies.
    The Reserve Bank features because the custodian and supervisor of foreign exchange reserves, and operates throughout the general coverage framework agreed upon with the federal government. It allocates the {dollars} for particular functions.
    For instance, underneath the Liberalised Remittances Scheme, people are allowed to remit as much as $250,000 yearly. The RBI makes use of its foreign exchange kitty for the orderly motion of the rupee. It sells the greenback when the rupee weakens and buys the greenback when the rupee strengthens.  WITH PTI