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NEW DELHI — India’s gold reserves are increasing at a regular basis and according to experts, bullion is likely to remain supported by safe-haven demand and strong buying among gold exchange-traded fund (ETF) investors.
As per latest data by the Reserve Bank of India (RBI), gold reserves increase by $726 million to $63.613 billion, compared to $62.887 billion last week.
Gold is the second largest contributor to India's forex reserve.
India's foreign exchange reserves has scaled a new high $692.296 billion, up by $2.838 billion in the week that ended on September 20. As per global financial firms, the forex reserves are at record all-time high levels and are set to cross $700 billion in FY25 sooner than expected.
According to a latest note by global investment firm Jefferies, RBI's forex reserve is estimated to go up by a massive $53 billion to reach $700 billion in the current fiscal (FY25E).
Experts said India’s strong forex will boost economic growth trajectory by strengthening its position internationally, drawing in foreign investments, and promoting domestic trade and industry.
Notably, Special Drawing Rights (SDRs) increased by $121 million to $18.540 billion as of September 20, compared to their previous level of $18.419 billion on September 13.
The country’s reserve position with the International Monetary Fund (IMF) fell $65 million to $4.458 billion as of the latest data filing.
The central bank intervenes in the foreign exchange market to keep the volatility in the Indian currency in check.
Meanwhile, the strong FII buying witnessed this month continued for the week. FIIs have invested INR 57,359 crore so far in September with investment through the exchanges alone touching INR 46480 crore.
Total investment by FIIs so far in 2024 now stands at INR 100,245 crore. This has contributed to the stability in rupee this year, said trade analysts.