New Delhi, Sep 4 (IANS) Business chamber Assocham on Friday welcomed India’s foreign exchange reserves reaching a record high of $740.80 billion, as of August 28, reflecting a robust external sector and strengthening confidence in the Indian economy.
The reserves increased by $11.48 billion during the week, marking the ninth consecutive weekly rise. Foreign Currency Assets, the largest component of India’s reserves, crossed the $600 billion milestone, rising by $9.34 billion over the previous week. Gold reserves, the second-largest component, stood at $116.41 billion.
Assocham President Nirmal K. Minda said that the record accumulation of foreign exchange reserves provides a strong cushion against global economic uncertainties and external shocks.
A robust forex position will contribute to greater currency stability, strengthen macroeconomic resilience, support economic growth and enhance investor confidence, he said.
The strong reserve position also improves India’s capacity to manage external financing requirements, strengthens the country’s global financial standing and enhances its international competitiveness, Minda added.
It provides greater policy space to navigate volatility in global financial markets, commodity prices and capital flows, the industry body said.
An increase in the foreign exchange reserves reflects strong fundamentals of the economy and gives the RBI more headroom to stabilise the rupee when it turns volatile.
A robust forex kitty enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.
Meanwhile, India’s current account deficit (CAD) stood at $4.2 billion in the April-June quarter (Q1) of the current financial year, holding steady at 0.5 per cent of GDP despite the rising prices of oil, LPG and fertilisers in the global market due to the West Asia crisis, according to data released by the RBI on Tuesday.
The CAD in the same quarter of the previous financial year was estimated at 0.4 per cent of GDP.
Net services receipts increased to $51.6 billion in Q1 of 2026-27 from $47.9 billion in the first quarter of the previous financial year as services exports have risen on a year-on-year basis in major categories such as computer services, other business services and transportation services.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $ 42.9 billion during the first quarter from $33.2 billion in the same period of the previous year.
Foreign direct investment (FDI) recorded a net inflow of $ 6.1 billion in the first quarter, up from $5.2 billion in the same quarter last year.
–IANS
sps/vd