India’s forex reserves jump $6.99 billion

New Delhi

India’s foreign exchange reserves saw a strong rise of $6.99 billion to reach $692.72 billion for the week ending May 23, according to the RBI’s weekly report released on Friday. The main part of the reserves, foreign currency assets, grew by $4.52 billion to $586.17 billion. Gold reserves also increased sharply by $2.37 billion to $83.58 billion. Special Drawing Rights (SDRs) went up by $81 million to $18.57 billion, while India’s reserve position with the IMF rose by $30 million to $4.4 billion.

The previous week had seen a decline of $4.89 billion in forex reserves, dropping to $685.73 billion. Before that, reserves had increased by $4.5 billion to $690.62 billion in early May. A strong forex reserve helps strengthen the rupee against the US dollar. It shows the economy’s solid fundamentals and gives the RBI more power to stabilize the rupee when needed. The RBI can sell dollars in the market to stop the rupee from falling too fast, but a smaller reserve limits this ability.

On another positive note, India’s exports of goods and services grew by 12.7% in April, reaching $73.8 billion, compared to $65.48 billion the previous year. Merchandise exports rose by 9% to $38.49 billion, led by a big jump in electronic goods exports, which grew nearly 40% to $3.69 billion. Engineering goods exports also increased by 11.28%, reaching $9.51 billion, while gems and jewellery exports went up by 10.74% to $2.5 billion. These numbers reflect India’s growing manufacturing and export strength despite global economic challenges.