India continues to receive good news on the foreign exchange reserves front during the Corona crisis. The latest Reserve Bank figures show that for the first time, foreign exchange reserves have crossed the $500 billion level.
What do the figures say?
According to data, the foreign exchange reserves grew by $8.22 billion in the week ended June 5, reaching $501.70 billion. This amount of foreign exchange reserves is equivalent to one year’s import expenses. Foreign exchange reserves rose $3.44 billion to $463.48 billion in the week ended May 29. If compared to India’s foreign exchange reserves from other countries, China and Japan have moved up to the third position.
There are many reasons for the growth of forex reserves. The biggest reason is the decline in crude oil demand. In fact, the demand for fuel had come down due to the lockdown in India since last March. Moreover, the steep fall in crude oil prices has also supported foreign exchange reserves. In an easy language, crude oil has been cheaper and less procured. Because of this, the government has to pay less dollars.
Obviously, the low dollar payment has resulted in savings and an increase in foreign exchange reserves. In addition, foreign companies have increased their investment in the Indian market in the last three-four months. Foreign investors have once again started flowing capital into the Indian stock market.
Country’s industrialist Anand Mahindra has expressed happiness over the continued increase in foreign exchange reserves. It has also missed the 90s. Sharing a news report, Mahindra tweeted, “India’s foreign exchange reserves almost fell to zero 30 years ago. We now have the third largest global reserves. In this environment, when the news is demoralizing. Don’t forget your country’s potential and use it properly to get back on the path of economic growth,” he said.
Gracia is a senior writer at Get Ignite, where she covers media and advertising and co-hosts the Original Content podcast. Previously, she worked as a tech writer at Adweek, a senior editor at the tech blog VentureBeat, and a local government reporter at the Hollister Free Lance. She attended Stanford University and now lives in Brooklyn.