India’s forex reserves rise to $118.58 billion

Himalayan News Service

New Delhi, May 15:

India’s foreign exchange reserves have reached a whopping $118.58 billion, despite the fact that but the inflow during the week leading up to the declaration of the general election results was much lower than average. The fresh inflows totalled a mere $89 million during the week ended May 7, central bank data released on Saturday revealed. But the inflow was $611 million during week ending May 1 and $291 million the previous week.

The latest data shows that during the week ended May 7, India received foreign currency assets of $84 million taking the tally to $113.09 billion. During the same period, gold deposit value remained steady at Rs 4.19 billion. Experts, however, feel it is too early for any uncertainty about the new government and its economic policies to impact inflows of funds as the fundamentals are strong and Indian economy is on a strong footing. “The portfolio investors will wait and watch while it is too early for foreign institutional investors to react. It is normally a wait and watch period during transition of a government as it takes time to settle. Moreover, fundamentals of Indian economy remain same,” said Nagesh Kumar, economist with the Research and Information Systems for Non-aligned and other Developing Countries (RIS).

About the rise in foreign currency assets, the Reserve Bank of India states the “foreign currency assets expressed in dollar terms include the effect of appreciation/depreciation of non-US currencies (such as Euro, Sterling, Yen) held in reserves”. In the case of the reserve position in the International Monetary Fund (IMF) or Reserve Tranche Position (RTP), earlier shown as a memo item, has been included in the reserves from the week ended April 2, in keeping with the international best practice, the central bank stated. The RTP share in the forex reserves has also increased by $5 million during the week, according to the official statement. The special drawing right, allocated to member countries in proportion to their IMF quotas remained steady at $2 million.