Forex Reserves Hit Record High In India

  • India's foreign exchange reserves have reached a staggering new peak of $648.7 billion, as of May 17th, 2024.
  • This marks a significant milestone, surpassing the previous record set just weeks earlier.
  • The surge is attributed to multiple factors, including strong foreign direct investment and a rise in global remittances.
  • A robust forex reserve provides India with a buffer against external economic shocks and strengthens its import cover.
  • This financial cushion can also help stabilize the rupee and provide the Reserve Bank of India with more flexibility in managing monetary policy.
  • Some experts caution however, that a high reserve level could indicate underutilization of capital and might necessitate policy adjustments.

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