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26 Jan 2015
India FX Reserves At Record High On Aggressive USD Buying
FXStreet (Mumbai) - Foreign exchange reserves in India touched an all time high at USD 322.14 billion in mid-January, according to data published by the Reserve Bank of India (RBI), registering a new record high and surpassing the previous record of USD 320.785 billion in September 2011.
India’s forex reserves surged on the back of Reserve Bank of India's conscious efforts to boost the forex kitty by aggressively buying US dollar to cushion against possible outflows once the US Federal Reserve starts tightening monetary policy.
With a high USD stockpile, forex reserves now secure more than nine months imports, significantly above some six months of cover in 2013.
Bankers say the RBI has kept the rupee from appreciating sharply by absorbing over 90% of the debt flows. The rupee had moved in a tight band of USD 60-63 in 2014 and has remained largely stable so far in January as well.
The RBI has been on a path to build up its dwindling foreign exchange reserves following India's rupee turmoil in 2013 and following a balance of payment crisis a decade ago.
India’s forex reserves surged on the back of Reserve Bank of India's conscious efforts to boost the forex kitty by aggressively buying US dollar to cushion against possible outflows once the US Federal Reserve starts tightening monetary policy.
With a high USD stockpile, forex reserves now secure more than nine months imports, significantly above some six months of cover in 2013.
Bankers say the RBI has kept the rupee from appreciating sharply by absorbing over 90% of the debt flows. The rupee had moved in a tight band of USD 60-63 in 2014 and has remained largely stable so far in January as well.
The RBI has been on a path to build up its dwindling foreign exchange reserves following India's rupee turmoil in 2013 and following a balance of payment crisis a decade ago.