India’s Forex Reserves Soar Beyond $600 Billion Mark, Indicating Economic Resilience


December 8, 2023

New Delhi, India

In a significant economic development, India’s foreign exchange reserves have surged beyond the $600 billion mark, marking a resilient financial landscape. The latest figures, as of December 1, 2023, reveal that the reserves stand at USD 604 billion, reflecting a notable increase from the previous week’s USD 597.935 billion. This achievement comes after nearly four months since the reserves were last above the $600 billion threshold on August 11, 2023.


India’s Forex Reserves Surpass $600 Billion Milestone

Reserve Bank Governor Shaktikanta Das, unveiling the December bi-monthly monetary policy, expressed confidence in India’s capability to comfortably meet external financing requirements. The governor’s assurance signifies a positive outlook on the nation’s economic stability and resilience amidst global economic fluctuations.

Indian Rupee Stability Amid Global Challenges

Governor Das highlighted the relative stability of the Indian rupee compared to emerging market economy (EME) peers throughout 2023. Despite elevated US treasury yields and a stronger US dollar, the Indian rupee demonstrated low volatility, showcasing the nation’s improving macroeconomic fundamentals.

Exchange Rate Volatility: India Leads Among Emerging Economies

The coefficient of variation for the daily INR exchange rate against the US dollar in 2023 stands at a commendable 0.66, marking the lowest among peer emerging economies. This includes countries such as China, Malaysia, Russia, Turkey, Vietnam, South Africa, and Thailand.

Positive Trends in Foreign Investments

Foreign portfolio investment (FPI) flows have experienced a significant turnaround in the fiscal year 2023-24, with net FPI inflows reaching USD 24.9 billion as of December 6. Simultaneously, net foreign direct investment (FDI) moderated to USD 10.4 billion in April-October 2023 from USD 20.8 billion a year ago.

External Vulnerability Indicators Showcase Strength

India’s external vulnerability indicators exhibit higher resilience compared to its EME peers, showcasing the nation’s robust economic position. The article underscores that inflows under external commercial borrowings (ECBs) and non-resident deposit accounts are notably higher than the previous year.

Also Read: RBI MPC Meeting: Economic Resilience as Repo Rate Holds at 6.5%

In conclusion, the latest surge in India’s forex reserves, coupled with the stability of the rupee and positive trends in foreign investments, reflects the nation’s economic resilience. Governor Das’s confidence in meeting external financing requirements further solidifies India’s position in the face of global economic uncertainties.