India's forex reserves rise $7.26 billion to $674.193 billion
Mumbai, July 10
India's foreign exchange reserves surged by $7.260 billion to $674.193 billion in the week ended July 3, reversing the decline recorded in the previous week, according to data released by the Reserve Bank of India on Friday.
The value of India's gold reserves rose by $2.669 billion to $105.205 billion during the reporting week.
The country's holdings of Special Drawing Rights (SDRs) with the International Monetary Fund also increased by $65 million to $18.623 billion.
The country's forex reserves had fallen in the preceding reporting week. The foreign exchange reserves declined by $5.65 billion to $666.93 billion in the week ended June 26.
Despite the recent volatility, India's reserves remain among the highest globally, although they are below the record high of $728.494 billion reached in the week ended February 27.
Meanwhile, banks have registered a gradual increase in the flow of overseas funds after the rollout of the Reserve Bank of India's (RBI) revised Foreign Currency Non-Resident Bank (FCNR-B) deposit scheme and expect collections to accelerate further this month as awareness among NRIs is growing.
The banking industry has mobilised an estimated $3-4 billion through FCNR-B deposits so far, according to reports. Bankers expect inflows to gather pace in the coming weeks, particularly from non-resident Indians based in the Gulf region, the reports added.
Notably, the revised scheme is expected to attract $40-50 billion in fresh FCNR-B deposits over time, according to bankers. They said higher interest rates and the Reserve Bank of India's decision to bear banks' hedging costs are expected to support deposit mobilisation.
Banks have intensified outreach efforts to raise awareness of the revised FCNR-B scheme among overseas depositors. Lenders are engaging more actively with NRI customers across key overseas markets to encourage participation.
Bankers expect the Gulf region to contribute a significant share of incremental FCNR-B deposits, driven by Indian expatriates living and working in the region.
— IANS
Reader Comments
Every time I see these numbers, I wonder - are we saving too much? Reserves are great for crisis management, but maybe some of this could be invested in infrastructure or education? Just a thought. The gold reserves increase is nice, but gold doesn't earn interest, right?
The $40-50 billion target for FCNR-B seems ambitious but doable given the Gulf NRI population. My uncle in Dubai has been talking about this scheme - higher rates and RBI covering hedging costs is a gamechanger. Finally some good economic news! 😊
Impressive resilience! $674 billion is a solid cushion. But I'm cautious - the fall from $728 billion to $666 billion in just a few weeks shows how volatile these reserves can be. The RBI needs to keep a close watch, especially with global interest rates fluctuating. Still, better than many peers.
As an economist watching India from abroad, this is a very healthy buffer. The FCNR-B strategy is clever - tapping into the NRI diaspora, especially Gulf workers. But I'd caution against over-reliance on short-term deposits. Long-term capital inflows would be more sustainable.
My cousin works in an Indian bank's NRI desk in Dubai - they're seeing huge interest in this FCNR-B scheme. The Gulf Indian community is excited about the higher rates. Hope the banks process smoothly and don't create unnecessary paperwork headaches. 🤞
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