indo asian news service, Mumbai, April 11: India’s foreign exchange reserves increased by $1.62 billion to $343 billion for the week ended April 3, Reserve Bank of India (RBI) data showed.
According to analysts, the Indian reserves got a boost during the week under review from an exponential rise in the foreign currency assets, the biggest component of the forex reserves.
The foreign currency assets, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.
The Indian reserves hold nearly 20-25 percent of the non-dollar currencies. The reserves are also being build up by the RBI to absorb any future global financial shock like the one witnessed in June 2013.
“The reserves are being build-up to counter any future financial shocks like the one which was witnessed at the time the tapering announcements were made. Apart from that, the reserves will also act as a support to the Indian rupee,” Anindya Banerjee, Kotak Securities senior manager, currency derivatives, told IANS.
“The Indian rupee is very stable currently and the reserves will make sure that it will remain so. A healthy reserve will make sure that any other external shocks are taken care of,” Banerjee added.