FOREX reserves of India reached a peak of
$327.88 billion based on published reports of the Reserve Bank of India. This
was an increase of $5.8 billion from the previous mark of $322 billion.
The preceding record was $322.12 as of January
16. This can be attributed to the considerable purchase of bonds and likely
economic reforms that will be initiated by the government as well as successful
reduction of inflation by the central bank.
Foreign investors were responsible for pouring
in $26.4 billion worth of bonds and $16 billion of shares last year.
The central bank is striving to stabilize the
currency following the rupee’s plunge 10 years ago due to diminishing reserves
and excessive current account shortfall.
The Indian currency has been one of the best
performers in Asia during the first six weeks of 2015. It gained two percent
versus the US Dollar because of capital inflows and anticipation that the RBI
will ease policy just to enhance growth.
Central Bank Governor Raghuram Rajan defended
the RBI’s intervention in the FOREX market to preserve the stability of the
rupee.
He also stated the existing account shortage
will probably decline to 1.3 percent of Gross Domestic Product. It can even go
down lower next fiscal year. The deficit has dwindled by 4.8 percent. FOREX
assets increased to $303.32 billion ($5.814 billion). These include
appreciation/depreciation of other currencies like the yen, euro and pound
sterling. Gold reserves were unmoved at $19.377 billion.
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