New Delhi: Data released by the Reserve Bank of India (RBI) on Friday showed that India’s foreign exchange reserves fell by $10.746 billion to $690.43 billion in the week ended October 11 due to rising geopolitical tensions and FII selling. At the end of September, the foreign exchange rate hit a record high of $704.885 billion. In the last reporting week, foreign exchange fell $3.709 billion to $701.176 billion.
Meanwhile, gold reserves fell by $98 million this week to $65.658 billion, according to the central bank. Special Drawing Rights (SDR) fell by $86 million to $18.339 billion in the week ended October 11. The country’s reserve position with the International Monetary Fund (IMF) fell by $20 million to $4.333 billion.
Going forward, India’s foreign exchange reserves are expected to grow. A strong foreign exchange will drive its economic growth by strengthening its international standing, attracting foreign investment, and boosting domestic trade and industry.
Industry experts say stronger foreign exchange and a strong monetary policy stance are boosting confidence in trade and industry and attracting foreign investment amid geopolitical fragility.
Meanwhile, gold’s share of the country’s foreign exchange has surged by more than 209% since 2018. Gold surged above $2,710.
Gold has delivered impressive returns of over 22% in 2024, and on a Diwali basis, returns have reached nearly 30%. This has made gold one of the best-performing currencies this year. Experts say that going forward, the price momentum remains strong with a potential upside target of Rs 78,500 in the coming sessions.