New Delhi, November (IANS) Amid continued selling of shares in the stock market by foreign institutional investors (FII) and rising geopolitical tensions, India’s foreign exchange reserves fell by $3.46 billion to $684.8 billion in the week ending October 25. This emerged from figures from the Reserve Bank of India (RBI) on Friday.New Delhi, November Amid continued selling of shares in the stock market by foreign institutional investors (FII) and rising geopolitical tensions, India’s foreign exchange reserves fell by $3.46 billion to $684.8 billion in the week ended October 25 , according to data released by the Reserve Bank of India (RBI) announced this on Friday. However, gold reserves, which are part of the foreign exchange market, rose by $1.08 billion this week to $68.53 billion, according to the central bank.
There has been a surge in gold buying amid geopolitical tensions. According to industry experts, gold now also acts as a hedge against US economic sanctions, as it has traditionally been a safe haven and hedge against inflation.
Despite inflation being subdued, gold has risen to new highs. Gold’s share of the country’s foreign exchange reserves has also increased by more than 210 percent since 2018.
India’s foreign exchange reserves rose to a record high of $704.885 billion at the end of September, placing the country fourth globally after China, Japan and Switzerland in the size of its currency coffers.
The country’s foreign exchange reserves have increased by a total of $38.39 billion in the current fiscal year, which the RBI said is enough to cover 11.2 months of imports on a balance of payments basis.
This reflects the strong macroeconomic fundamentals of the economy.
Looking ahead, India’s foreign exchange reserves are expected to grow and the strong currency will boost its economic growth trajectory by strengthening its international position, attracting foreign investment and promoting domestic trade and industry. The changes in foreign currency assets are due to the actions of the central bank in the forex market and fluctuations in the value of foreign assets within the reserves. According to experts, the precious metal is likely to close this week on a positive note amid support from safe demand, ETF buying, the uncertain outcome of the US election and increasing bets on aggressive rate cuts from global central banks.
–IANS
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