Mumbai: Due to the return of FPIs, India’s foreign exchange reserves increased by $2.4 billion during the week ending July 29 after declining for four straight months. The increase in forex rolled back and reversed a four-week drop in trend. By July 22, it had decreased from $593 billion as of June 24 to $ 571.5 billion. To endure the volatility in their currencies, many nations have turned to their foreign currency reserves. Apart from India, these nations also include Thailand and Korea. According to Bloomberg, these nations have sold dollars to stop the depreciation of their currencies, causing a total $115 billion reduction in their foreign exchange reserves this year. They are concurrently dealing with capital outflows, currency depreciations, reserve losses, and a rapid worsening of external financial conditions. Web Desk
The governor stated in his statement that some of them are also dealing with growing debt problems and default.
Despite the subsequent decrease, India continues to have the fourth-largest foreign exchange reserves in the world. In terms of the strength of the external sector, India also performs significantly better than developing market nations, according to the RBI.
In just four weeks, the nation’s foreign exchange holdings had decreased by around $17 billion. The foreign exchange reserves fell by $1.152 billion during the same week when the Indian rupee, for the first time, crossed the psychologically significant 80 to dollar threshold.
India’s foreign exchange (forex) reserves decreased by $7.541 billion and $8.062 billion, respectively, for the week ending July 15.
