New Delhi/Mumbai: – There was an addition of nearly $3.5 billion to the Indian foreign exchange reserves, in a matter of only a week, taking it to a record $555 billion. There has been an increase of a whopping $80 billion, even during the times of Coronavirus crisis, and the annualised increase is $115 billion. Reduced imports of oil and Gold, the increasing percentage of exports and consistency in foreign investment inflows, are the factors responsible for this phenomenal rise in the Foreign Exchange reserves.
As per the statistics released by the Reserve Bank of India, the Foreign exchange reserves had reached $555.120 billion, in the week ended on 16th of October. On the 9th of October, the Foreign exchange reserves had already crossed the $550 billion level. $3.65 billion have been added to it, in the next seven days. The foreign exchange component in the reserves is $3.539 billion and there has been an addition of $86 million in the value of the Gold reserves.
Currently, India has the fifth-highest Foreign exchange reserves after China, Japan, Switzerland and Russia. While the economies of many countries are crashing, there is a steady flow of foreign exchange to India. The imports of crude oil and Gold have reduced, in the lockdown period and the overall expenditure on imports also has reduced. At the same time, the flow of foreign investment has been increasing and the effects are visible. The Indian rupee is becoming stronger against the US dollar and as per experts, this is an important development, in respect of the efforts to bring the economy back on track.
There was an addition of $8.42 billion in the foreign reserves, in the first week of June taking it above $500 billion. A country’s foreign reserves crossing half a trillion dollars is looked at as a historical event. In the decade of 1990, the Indian foreign reserves had reached almost zero and India was forced to mortgage its gold reserves to raise funds.