At $729 billion, forex kitty hits a record

umbai: India’s foreign exchange reserves touched a record high of $729.3 billion as of August 21, after banks stepped up the drive to mobilise NRI deposits under the central bank’s concessional swap window in the final two weeks before it closes on August 31.

Reserves increased $12.4 billion during the week, with foreign currency assets increasing $9.4 billion to $591 billion, while the value of gold reserves rose by $2.8 billion to $114 billion. Forex reserves last touched a high of $728 billion late February this year. As of August 21, Indian banks have mobilised $65.4 billion in foreign currency non-resident (FCNR-B) deposits under the Reserve Bank of India’s special forex swap facility. Total foreign exchange inflows through this specific window reached $72.85 billion, the RBI said in a statement.

Reserves have increased by $48 billion since the scheme was announced on June 5.

The full $72 billion in gross inflows will not necessarily be reflected one-for-one in India’s foreign exchange reserves. Some of the dollar flows may be used by the central bank to support the rupee through spot market intervention, while a portion may also go toward reducing its outstanding forward liabilities.

The net short forward positions of the RBI stood at $104 billion as of June 30.