The Reserve Bank of Indias’ foreign exchange reserves touched a fresh high of $674.9 billion in the week ended 2nd August, central bank data showed.
The total reserves rose by $7.5 billion and were primarily driven by foreign currency assets which rose $5.1 billion to $592 billion.
“India’s external sector remains resilient as key indicators continue to improve and we remain confident of meeting our external financing requirements comfortably”, RBI governor Shaktikanta Das said in his monetary policy statement on Thursday.
The RBI has likely absorbed dollar inflows into local equities and local bonds after the inclusion of Indian government securities in the JP Morgan emerging market bond index.
“Every week they (RBI) have been accumulating reserves, and there have been strong flows on the debt side. So this is just the RBI absorbing inflows and building reserves”, Madhavi Arora, said Chief Economist at Emkay Global Financial Services.
For the week ended 2nd August, foreign investment through the fully accessible route was $0.9 billion, CCIL data showed. Local equities have seen foreign investment of $2.7 billion so far this year, according to National Securities Depository Limited.
The rupee closed at 83.75 against the US dollar on 2nd August, depreciating 0.03% in that week.
