India’s forex reserves have surged to USD 604 billion as of December 1, marking a return above the USD 600 billion milestone after nearly four months. This notable increase was highlighted by Reserve Bank Governor Shaktikanta Das during the unveiling of the December bi-monthly monetary policy. He expressed confidence in meeting external financing requirements comfortably.
The last time India’s forex reserves surpassed the USD 600 billion mark was on August 11, 2023. Governor Shaktikanta Das reassured that the country’s economic fundamentals remain robust, emphasizing India’s ability to navigate global challenges effectively.
Providing context, the forex reserves stood at USD 597.935 billion in the week ending November 24. The current resurgence follows a peak of USD 642 billion in October 2021, with subsequent fluctuations attributed to the central bank’s strategic deployment to safeguard the rupee amidst global pressures.
Governor Das underscored the stability of the Indian rupee, citing its low volatility compared to emerging market economies in 2023, despite heightened US treasury yields and a stronger US dollar. He attributed this resilience to India’s improving macroeconomic fundamentals and its capacity to withstand global economic turbulence.
The coefficient of variation for the daily INR exchange rate against the US dollar in 2023 is reported at 0.66, the lowest among comparable emerging economies, including China, Malaysia, Russia, Turkey, Vietnam, South Africa, and Thailand. This metric reflects the Indian rupee’s relative stability and showcases its resilience amid global uncertainties.
As India’s forex reserves continue to rebound, the Governor’s optimistic outlook aligns with the country’s commitment to maintaining a strong economic position and effectively managing external challenges. The consistent growth in reserves indicates a proactive approach to ensuring financial stability and meeting the evolving needs of the Indian economy.