Mumbai, Nov 8 (IANS) India’s foreign exchange reserves fell by $2.6 billion to $682.13 billion as of November 1, data released by the Reserve Bank of India (RBI) showed on Friday.
However, gold reserves, which form part of the foreign exchange kitty, increased by $1.2 billion to $69.8 billion during the week, according to the central bank.
There has been a surge in gold buying amid geo-political tensions. According to industry experts, gold is now acting as a hedge against US economic sanctions too, traditionally being a safe haven asset and as a hedge against inflation. Despite inflation being moderated, gold has rallied to new highs. The share of gold in the country’s forex reserves has also surged more than 210 per cent since 2018.
India’s foreign exchange reserves had soared to an all-time high of $704.885 billion at the end of September taking the country to the 4th position globally after China, Japan, and Switzerland in the size of its forex kitty. The country’s forex reserves have overall gone up by $34.5 billion in the current financial year which is sufficient to cover imports for 11.2 months based on the balance of payments, according to the RBI. This reflects the strong macroeconomic fundamentals of the economy.
The RBI uses the forex reserves to control the volatility in the rupee which results as hot money from the stock market flows out when foreign investors sell shares. The RBI releases dollars in the market in case the rupee falls sharply to prevent it from going into free fall. This helps to maintain stability in the Indian currency. Robust foreign exchange reserves help to make these operations easier and strengthen the rupee.
Meanwhile, Reserve Bank Deputy Governor Rabi Sankar said at a media event on Thursday that the RBI is well equipped to handle excessive exchange rate volatility that could result as a fallout of the Donald Trump presidency. He also ruled out allowing oversight rights of the Indian bond clearing platform to the European authorities, comparing such a provision to a sovereignty breach.
–IANS
sps/vd
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
