India's foreign exchange reserves surged for the third consecutive week to touch a new high of $343 billion on the back of confidence of overseas investors betting heavily on India growth story and pumping in dollars. This has prompted the Reserve Bank of India to buy those dollars from open market to avoid sharp volatility in the Indian currency.
Country’s forex reserves during the week ending April 3 increased by $1.63 billion to touch total reserves at a new high of $343.01 billion.
In the previous reporting week ending March 27, the reserves had jumped to $341.38 billion, rising by $1.38 billion.
During the April 3 week, foreign currency assets rose by $2.40 billion to $318.64 billion. Foreign currency assets constitute the bulk of the reserves and reflect the change in the value of reserves held in other global currencies, including the euro, pound and yen due to exchange rate movements.
Gold reserves fell $799 million to $19.04 billion. Special Drawing Rights and India’s reserve position with the IMF both edged up by $16.7 million and $5.4 million to $4.022 billion and $1.30 billion, respectively.
Dollar inflows may escalate in the next few weeks after rating company Moody's revised India's 'Baa3' rating outlook to 'positive' from 'stable' leading many to believe this will be followed by a rating upgrade.