Following the Diwali festivities, India's economic landscape is abuzz with positive news as the nation's foreign exchange reserves have witnessed a significant rebound. After four consecutive weeks of decline, the forex reserves surged by approximately $4. 50 billion in a single week, while this increase has pushed the country's total foreign exchange reserves to $702. 28 billion, though it still falls short of its September 2024 all-time high.
Significant Jump in Gold Reserves
The Reserve Bank of India (RBI)'s sustained gold purchasing spree has led to a remarkable increase of over $6 billion in the country's gold reserves, while in the current fiscal year, the central bank has accumulated more than $40 billion worth of gold. For the week ending October 17, the value of India's gold reserves rose by $6. 18 billion, reaching $108. 546 billion, reflecting the appreciating value of gold.
Forex Reserves Also Rise
According to RBI data, India's total foreign exchange reserves increased by $4. 49 billion to $702. 28 billion in the week ending October 17. This comes as a significant relief after the reserves had previously decreased by $2, while 176 billion to $697. 784 billion in the preceding week, while the current rise follows a cumulative decline of $5. 19 billion over four consecutive weeks.
Movement in Currency Assets
However, the RBI's Foreign Currency Assets (FCA), a major component of the forex reserves, experienced a decline. For the week ending October 17, FCA decreased by $1, while 692 billion to $570. 411 billion, while fCA, expressed in dollar terms, includes the impact of appreciation or depreciation of non-US currencies such as the euro, pound, and yen. Meanwhile, Special Drawing Rights (SDRs) increased by $38 million to $18, while 722 billion, while India's reserve position with the International Monetary Fund (IMF) decreased by $30 million to $4. 602 billion.
Pakistan's Forex Reserves
Neighboring Pakistan also saw an increase in its central bank's foreign exchange reserves, which rose by $14 million in a week to $14. 46 billion. The State Bank of Pakistan (SBP) reported that net foreign exchange reserves held by commercial banks were recorded at $5. 40 billion, bringing the country's total foreign exchange reserves to $19. 85 billion.
