RBI Governor Assures on India's Forex Reserves Amid Market Concerns
India's forex reserves sufficient, not a matter of concern: RBI governor
Business Standard
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Reserve Bank of India Governor Sanjay Malhotra reassured that India's foreign exchange reserves, currently at $697.1 billion, are sufficient and not a concern, despite recent declines. He emphasized that trade agreements with major economies will bolster current and capital accounts, aiding in the reduction of the balance of payments deficit.
- 01India's forex reserves stand at $697.1 billion as of April 3.
- 02Reserves have decreased from a record high of $728.49 billion in February.
- 03Current account deficit widened to $13.2 billion, or 1.3% of GDP.
- 04Trade agreements with major economies aim to improve India's balance of payments.
- 05Foreign portfolio investment flows expected to improve in the coming year.
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Reserve Bank of India Governor Sanjay Malhotra stated that India's foreign exchange reserves are adequate, currently amounting to $697.1 billion as of April 3, up from $688.06 billion the previous week. Despite a decline from a record high of $728.49 billion in late February, attributed to forex interventions and lower gold prices, Malhotra assured that the reserves are sufficient for at least 11 months. He noted that India's current account deficit widened to $13.2 billion in the last quarter, driven by a higher goods trade deficit. However, he expressed confidence in the robustness of the capital accounts and the manageability of the current account. Malhotra highlighted that trade agreements with major economies, including the UK, will help improve India's balance of payments position. He anticipates a recovery in foreign portfolio investment flows, particularly in the technology and financial services sectors, following a significant selloff in the previous fiscal year.
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The assurance from the RBI governor indicates stability in the financial markets, which could positively affect investor confidence and economic growth.
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