India’s forex reserves surge above $600 billion after 4 months: RBI Governor

India's foreign exchange reserves have surged beyond the $600 billion threshold as of December 1, marking a return to this milestone after a gap of nearly four months. The last time India's forex reserves exceeded $600 billion was on August 11 earlier this year.

"India's foreign exchange reserves stood at $604 billion as of December 1, 2023. We remain confident of meeting our external financing requirements comfortably," Reserve Bank Governor Shaktikanta Das said.

In the previous week ending November 24, the reserves were recorded at $597.935 billion. 

Notably, in October 2021, India's foreign exchange reserves had reached an all-time high of $642 billion. However, the reserves saw a reduction as the central bank utilized them to safeguard the rupee amidst global pressures over the past year.

Governor Das highlighted the relatively low volatility of the rupee compared to emerging market economy (EME) peers in 2023, despite elevated US treasury yields and a stronger US dollar. 

"The relative stability of the rupee reflects the improving macroeconomic fundamentals of the Indian economy and its resilience in the face of formidable global tsunamis," he said.

The coefficient of variation for the daily Rupee exchange rate against the US dollar was noted at 0.66 for the calendar year 2023, the lowest among peer emerging economies such as China, Malaysia, Russia, Turkey, Vietnam, South Africa, and Thailand.

Das also reported a crucial turnaround in foreign portfolio investment (FPI) flows for year 2023-24, with net FPI inflows of $24.9 billion as of December 6, in contrast to net outflows in the preceding two years. 

Meanwhile, net foreign direct investment (FDI) moderated to $10.4 billion in April-October 2023, from $20.8 billion a year ago.

Furthermore, net inflows under external commercial borrowings (ECBs) and non-resident deposit accounts exceeded last year's figures. India's external vulnerability indicators were noted to exhibit higher resilience compared to EME peers. 

(With PTI inputs)