Forex reserves up by USD 5.94 bn to hit record USD 507.64 bn

In the previous week ended June 5, the foreign exchange reserves had crossed the half-a-trillion mark for the first time after it surged by a massive USD 8.22 billion and reached USD 501.703 billion, according to the weekly data released by the Reserve Bank of India.

In the reporting week, the foreign currency assets, a major component of the overall reserves, rose by USD 5.106 billion to USD 468.737 billion.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

According to economists, the increase in foreign exchange reserves is due to higher capital inflows and also due to the narrowing current account deficit as trade activities have come to a standstill due to the disruptions caused by the COVID-19 pandemic.

This amount of forex reserves will be sufficient to cover the country import for one year, they said.

The gold reserves in the reporting week rose by USD 821 million to USD 33.173 billion, the RBI data showed.

The special drawing rights with the International Monetary Fund (IMF) was up by USD 12 million to USD 1.454 billion.

The country's reserve position with the IMF also rose by USD 3 million to USD 4.280 billion during the reporting week, the data showed.