Mumbai– India’s foreign exchange reserves rose by $4.5 billion to reach $690.62 billion for the week ending May 9, according to data released by the Reserve Bank of India (RBI) on Friday.
Foreign currency assets, the largest component of the reserves, increased by $196 million to $581.37 billion. These assets are expressed in U.S. dollar terms and reflect the impact of fluctuations in the value of other major currencies such as the euro, pound, and yen.
Gold reserves also edged higher, rising by $4.5 million to $86.33 billion during the reporting week, the RBI said.
However, special drawing rights (SDRs) declined by $26 million to $18.53 billion, while India’s reserve position with the International Monetary Fund (IMF) fell by $134 million to $4.37 billion.
A rise in forex reserves is seen as a sign of strong economic fundamentals and provides the central bank with greater flexibility to stabilize the rupee in times of volatility. A robust reserve position enables the RBI to intervene effectively in the spot and forward currency markets by selling dollars to prevent sharp depreciation of the rupee.
Conversely, a decline in reserves limits the RBI’s ability to cushion the domestic currency during periods of stress.
Meanwhile, India’s external sector has shown resilience, with total exports of goods and services growing by a strong 12.7% year-on-year in April, reaching $73.80 billion. This compares to $65.48 billion during the same month last year, despite global headwinds such as U.S. tariff hikes, according to Commerce Ministry data released on Thursday.
Merchandise exports alone rose 9.03% to $38.49 billion in April, driven by significant gains in electronics and engineering goods—highlighting the country’s expanding manufacturing capabilities.
Exports of electronic goods surged by an impressive 39.51%, reaching $3.69 billion compared to $2.65 billion in April 2024.
Engineering goods exports also climbed 11.28% to $9.51 billion from $8.55 billion a year earlier. Meanwhile, exports of gems and jewelry rose 10.74% to $2.5 billion, up from $2.26 billion in the same period last year. (IANS)
