India's forex reserves have crossed the $700 billion mark for the first time, increasing by $12.6 billion during the week ended September 27, according to data released by the Reserve Bank of India (RBI). With this milestone, India becomes the fourth economy in the world to surpass $700 billion in foreign reserves, joining China, Japan, and Switzerland.
Foreign inflows hit $30 billion so far this year, led mainly by investments in local debt after they were included in a key J.P. Morgan index.
"Adequate FX reserves reduces currency volatility since RBI has adequate firepower to intervene if needed," Gaura Sen Gupta, economist at IDFC First Bank, said to Reuters news agency.
"Moreover it adds to investor confidence which reduces the risk of sudden capital outflows."
India's forex reserves have ballooned by $87.6 billion so far in 2024, already more than the near-$62 billion increase over the whole of last year.
