The Reserve Bank of India (RBI) reported on Friday that for the week ending July 5, the nation’s forex reserves surged by $5.158 billion, touching an unprecedented $657.155 billion. This figure surpasses the previous record of $655.817 billion set just last month.

The steady climb of India’s forex reserves has been a consistent trend in 2024, with a cumulative increase of approximately $35 billion since the year’s start.

Breaking down the components, India’s foreign currency assets (FCA), the biggest component of the forex reserves, rose by USD 4.228 billion to USD 577.110 billion. Concurrently, gold reserves increased by $904 million to $57.432 billion.

India’s foreign exchange reserves are now sufficient to cover over 11 months of projected imports, according to a recent RBI report.

The growth trajectory marks a stark contrast to 2022 when the reserves witnessed a substantial decline of $71 billion. However, 2023 saw a reversal with the RBI adding approximately $58 billion to its foreign exchange holdings.

Experts attribute the previous decline to increased costs of imported goods in 2022 and the RBI’s market interventions to stabilize the rupee against a strengthening US dollar.

The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.

(With ANI inputs)