Gold price pushes foreign exchange reserves to $320.78 billion high

Foreign exchange (forex) reserves rose by $1.61 billion to hit an all-time high of $320.78 billion for the week ended Sep 2 on the back of nearly $3 billion jump in the value of gold reserves, official data showed.

The forex reserves kitty has risen for the third consecutive week. The reserves had increased by $955 million in the previous week.

The value of gold reserves soared by $2.97 billion to $28.32 billion, according to the weekly statistical supplement of the Reserve Bank of India (RBI).

Gold prices have risen sharply in recent month, leading to a sharp jump in the value of gold reserves. Gold price surged to an all-time high of $1,921.15 an ounce early this week.

The increase is also an indication that the RBI has increased gold holding to hedge against the currency risk in view of the volatility in global economy and fragile nature of the major currencies, especially US dollar and euro.

However, all other components of the forex reserves kitty declined during the week under review.

Foreign currency assets, the biggest component of the forex reserves kitty, declined by $1.32 billion to $284.87 billion during the week ended Sep 2. The foreign currency assets rose by $944 million in the previous week.

The foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.

The value of special drawing rights (SDRs) declined by $24 million to $4.61 billion and reserves with the International Monetary Fund (IMF) fell by $16 million to $2.97 billion.

Through Ecomic Times

Leave a Reply