India’s forex reserves hit record high at $645.58 billion for week ending on March 29

The Reserve Bank of India’s foreign exchange reserves touched a new record high of $645.58 billion in the week ended March 29, topping the previous high of $642.49, latest central bank data showed.Forex reserves increased by $2.9 billion in the week ended March 29, primarily driven by the central bank’s foreign currency assets that rose $2.3 billion to $570.61 billion during the week.

“We have been consciously building reserves over the past four five years as the market moves prevailing upon the market situation,” said central bank governor Shaktikanta Das at the post-policy media briefing Friday. “That effort continues because it acts as a buffer against future risks especially in situations when the cycle turns and there is significant outflow of dollars”

The rise in the foreign exchange reserves was likely driven by the RBI’s dollar purchases amid foreign inflows into local capital markets.

In March this year, foreign portfolio investors deployed funds worth $6.3 billion in Indian stocks and bonds, National Securities Depository Ltd (NSDL) data showed.

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