India's forex reserves rise by $6.99 billion to cross $692.7 billion

New Delhi, May 30 (IANS) India's foreign exchange reserves recorded a robust increase of $6.99 billion to $692.72 billion for the week ended May 23, according to RBI’s weekly data released on Friday. Foreign currency assets, a major component of the reserves, surged by $4.52 billion to $586.17 billion, the figures showed.

There was also a sharp increase in the value of the gold reserves component of the reserves which went up by $2.37 billion to $83.58 billion during the week, according to the RBI data

The Special Drawing Rights (SDRs) rose by $81 million to $18.571 billion. India’s reserve position with the IMF rose $30 million to $4.401 billion during the week, the figures showed.

In the preceding week ended May 16, the country’s forex kitty had declined by $4.89 billion to $685.73 billion.

However, prior to this, the foreign exchange reserves surged by $4.5 billion to $690.62 billion for the week ended May 9.

Any strengthening of the country’s foreign exchange kitty also helps bolster the rupee vis-a-vis the US dollar.

An increase in the foreign exchange reserves reflects strong fundamentals of the economy and gives the RBI more headroom to stabilise the rupee when it turns volatile.

A strong forex kitty enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.

Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.

Meanwhile, India's external sector has emerged stronger with total exports of goods and services clocking a robust 12.7 per cent growth in April to touch the $73.8 billion mark compared with the corresponding figure of $65.48 billion during the same month last year, despite the global economic uncertainties triggered by the US tariff hikes, according to figures compiled by the Commerce Ministry.

The country's merchandise exports shot up by 9.03 per cent to $38.49 billion during the month with high-value electronics and engineering goods registering the highest growth, reflecting the expanding manufacturing base of the country.

Electronic goods exports increased by a whopping 39.51 per cent to $3.69 billion in April from $2.65 billion in the same month last year.

Engineering goods exports increased by 11.28 per cent to $9.51 billion during the month from $8.55 billion in April last year while gems & jewellery exports increased by 10.74 per cent to $2.5 billion from $2.26 billion.

--IANS

sps/pgh