India Forex Reserves Hit Record $740.803 Billion, Jump $11.475 Billion in a Week

India's foreign exchange reserves rose by $11.475 billion to reach an all-time high of $740.803 billion in the week ended August 28, according to data released by the Reserve Bank of India (RBI) on Friday. The increase took the country's reserves up by $49.696 billion from end-March levels and by $46.574 billion compared with the same period a year earlier, according to the data. In addition, foreign currency assets (FCA) -- the largest component of reserves --increased by $9.337 billion during the week to $600.67 billion.

While FCA holdings were up $48.387 billion from end-March and $16.73 billion higher than a year ago. Moreover, gold reserves rose by $2.191 billion on the week to $116.409 billion. And, gold holdings have increased by $1.014 billion since the end of March and were higher by $29.641 billion from a year earlier. India's Special Drawing Rights (SDRs) with the International Monetary Fund stood at $18.81 billion, down $43 million from the previous week. SDR holdings were up $188 million from end-March.

The country's reserve position with the IMF decreased by $11 million during the week to $4.914 billion. It was up $106 million from end-March. Separately, RBI data showed loans and advances to state governments declined to Rs 10,788 crore as of August 21 from Rs 14,225 crore a week earlier, a drop of Rs 3,437 crore. Outstanding advances to state governments were also lower than Rs 27,463 crore recorded in the corresponding period last year. The strong reserves were supported by strong foreign currency inflows following measures introduced by the RBI earlier in June such as special deposit programme for Indians and other non-resident customers.

Earlier in September, the RBI noted that India’s banking system has mobilised $136.38 billion in foreign currency inflows through the Reserve Bank of India’s special dollar-rupee swap facility. As of August 31, foreign currency non-resident (FCNR(B)) deposits contributed $127.23 billion to the total inflows and overseas foreign currency borrowings (OFCBs) accounted for another $5.26 billion, while external commercial borrowings (ECBs) brought in $3.89 billion.

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