Forex Reserves Seem to Surpass Record $600 Bn on Strong Capital Flow

India’s foreign exchange reserves seem to have swelled to a record $600-billion mark on the back of robust capital inflow, according to Reserve Bank of India (RBI) Governor Shaktikanta Das.

According to RBI data issued on May 28, the country’s foreign exchange reserves rose by $2.865 billion to a record high of $592.894 billion for the week ended May 21, driven by gold and currency assets.

“Based on the current estimation, we believe that our forex reserves may have crossed $600 billion,” Das said, announcing the bi-monthly monetary policy review.

To boost liquidity, the RBI announced several steps, including a special liquidity facility for various sectors impacted by the Covid-19 pandemic.

The central bank also announced G-sec Acquisition Programme (G-SAP) 2.0 which will help in calming yields and control undue volatility faced by market participants in the government securities market.

During the second quarter of the current fiscal, the RBI said it will purchase Rs 1.20 lakh crore of G-sec from the secondary market, as part of G-SAP 2.0.

The RBI will buy Rs 40,000 crore of government securities on June 17, and the remaining schedule will be announced later, Das said.