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[BUSINESS] · India · 16 sources

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India becomes world's 4th largest forex holder with record $785.7 billion

India has become the world's fourth-largest holder of foreign exchange reserves, overtaking Russia. According to Bloomberg data, India's reserves surged by a record $44.9 billion to reach $785.7 billion for the week ending September 4. This growth was primarily driven by strong dollar inflows under the Reserve Bank of India’s (RBI) Foreign Currency Non-Resident (Bank) deposits scheme.

Despite the record increase in total reserves, India's gold reserves component saw a decline of $2.59 billion, falling to $113.81 billion due to lower gold prices. The surge in foreign currency assets, which comprise the majority of the reserves, reached $648.17 billion.

To manage the resulting excess liquidity in the banking system, the RBI has announced an open market operation (OMO) to sell government securities worth Rs 1 lakh crore. These sales will be conducted in three tranches: Rs 50,000 crore on September 17, Rs 25,000 crore on September 21, and Rs 25,000 crore on September 28.

Separately, the Indian rupee faced downward pressure, closing at 95.57 against the US dollar on Friday, marking its fifth consecutive session of decline. Factors contributing to the rupee's volatility include elevated crude oil prices, rising global bond yields, and geopolitical tensions.

Entities

Bank of Japan · Brent crude · China · India · Indian rupee · Japan · Japanese yen · Kotak Securities · Reserve Bank of India · Russia · US dollar

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Sources

1 day ago
EUR/JPY Weekly Outlook [www.actionforex.com]
2 days ago