Foreign Exchange Reserves: There has been a huge decline in foreign exchange reserves from the all-time high. In the week ending August 9, the country’s foreign exchange reserves fell by $4.80 billion to $670.119 billion, which had reached a historic high of $675 billion in the previous week.
The banking sector regulator Reserve Bank of India has released the data of foreign exchange reserves on Friday, August 16, 2024. According to this data, the foreign exchange reserve has come down by $ 4.80 billion to $ 670.119 billion on August 9, 2024. In the previous week, the foreign exchange reserve had reached a lifetime high of $ 675 billion.
According to RBI data, foreign currency assets also decreased by $4.079 billion to $587.96 billion during this period. RBI’s gold reserve has also decreased and it has decreased by $860 million to $59.23 billion. SDR has increased by $121 million to $18.28 billion and the reserve in the International Monetary Fund has increased by $18 million to $2.63 billion.
If we look at the reasons for the decline in foreign exchange reserves, in recent days, foreign portfolio investors have sold heavily in the market, due to which the foreign currency reserve has decreased due to the increased demand for the dollar. Also, the rupee continues to weaken against the dollar, to stop which, there is a possibility of RBI’s intervention, due to which the reserve has decreased.
Announcing the monetary policy on 8 August 2024, the RBI Governor had said that India’s external sector remains dynamic due to continuous improvement in key indicators. He said, we are confident that we will be able to easily meet our external financing needs. The RBI Governor said that foreign portfolio investors have bought $ 9.7 billion in the domestic market between June 2024 and August 6, while an outflow of $ 4.2 billion was seen during April and May. Foreign direct investment has also increased during 2024-25 and gross FDI has jumped 20 per cent during April-May 20254, while net FDI has doubled compared to the same period last year.
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