India's forex reserves soar to new peak of $675 billion
India's foreign exchange (forex) reserves have reached an all-time high of $675 billion as of August 2, according to Reserve Bank Governor Shaktikanta Das. This surpasses the previous record of $670.857 billion set on July 19 this year, and is a significant increase from the last reported reserve of $667.386 billion as of July 26. Das stated that these figures demonstrate the resilience and strength of India's external sector.
RBI Governor expresses confidence in meeting external financing needs
Das expressed confidence in India's ability to meet its external financing requirements comfortably. This statement comes as the central bank has maintained repo rate at 6.5% for the ninth consecutive time. He also noted a shift in foreign portfolio investors (FPIs) who turned net buyers in the domestic market from June 2024, resulting in net inflows of $9.7 billion from June to August 6. In comparison, FPIs were net sellers in April and May with outflows of $4.2 billion.
Significant increase in gross foreign direct investment
Das also highlighted a significant increase in gross foreign direct investment (FDI) which rose by more than 20% in April-May this year. Net FDI flows during this period doubled compared to the corresponding period of the previous year. While external commercial borrowings by Indian entities moderated, deposits by non-residents grew in April and May. For FY25, RBI has kept the full year growth and inflation estimates at 7.2% and 4.5%, respectively.
