India’s foreign exchange reserves amounted to $688 billion, gold reserves increased
New Delhi| India’s foreign exchange reserves have fallen by $2.163 billion to $688.267 billion in the week ending October 18 due to global turmoil and selling by foreign institutional investors (FIIs). This information was received from the data released by the Reserve Bank of India (RBI). During this time, however, the gold reserve has increased by $1.7 billion to $67.44 billion.
According to industry experts, the reason for the increase in gold purchases is the increase in tension at the global level. Gold is used as a hedge against inflation and is considered a safe investment amid the turmoil. For this reason people are increasing investment in gold. This is supporting gold prices. Even after the decline in inflation, there has been a rally in gold this year and the share of gold in foreign exchange reserves has increased by 210 percent since 2018.
Foreign exchange reserves had shrunk by $10.746 billion to $690.43 billion by Oct. 10, according to data released last week by the central bank. Earlier in September, foreign exchange reserves touched an all-time high of $704 billion.
The value of Special Drawing Rights (SDRs) has fallen by $68 million to $18.271 billion in the week ending Oct. 18. Apart from this, India’s reserve position in the International Monetary Fund (IMF) has decreased by $16 million to $4.316 billion.
According to experts, India’s foreign exchange reserves are expected to increase and strong foreign exchange helps in attracting foreign investment at the international level and boosting domestic trade and industry. Further said bullion is likely to close on a positive note this week due to secure demand, ETF purchases, uncertain US election results and rising interest rate cuts by global central banks.
