India Records 2nd Highest Jump In Forex Reserves Among Major Economies in 2023: RBI Bulletin

The rain deficit in India is rapidly closing amid a highly cyclone-skewed distribution, and manufacturing and services activity in the country remains in expansion albeit with some sequential moderation in June, according to the RBI’s latest report released on Monday, July 17.

It said India’s foreign exchange reserves increased $71.8 billion since October 21, 2022, and stood at $596.3 billion on July 7, 2023, sufficient to cover 9.7 months of projected imports for 2023-24 or 95 per cent of total external debt outstanding at end-March 2023.

“India recorded the second highest accretion to foreign exchange reserves among major holding countries during 2023,” the Reserve Bank of India said in the report titled ‘RBI Bulletin – July 2023’.

The RBI Bulletin said global growth momentum appears to be stalling, especially manufacturing and investment, amid moderating headline inflation with a stubborn core. “Market expectations of future interest rates have gone up in response to the hawkish policy stance; equity prices have flattened; and bond yields have hardened.”

It added that the rain deficit in India is rapidly closing amid a highly cyclone-skewed distribution. Manufacturing and services activity remains in expansion albeit with some sequential moderation in June.

“The overall balance of payments improved in Q1:2023-24, indicating that financial flows comfortably exceeded the current account again on a quarterly basis,” the RBI said.

The current year 2023 is said to be an El Nino year, in which the monsoon is negatively impacted in India and, hence, leaves the country with less amount of rainfall.

The RBI said FPI flows recorded a 10-month high in June 2023 with India attracting the maximum FPI equity inflows among emerging market peers.

On the Gift Nifty, the RBI said, “The shifting of trade from the Singapore Exchange (SGX) to the NSE International Exchange (NSE IX) and the rebranding of SGX Nifty as Gift Nifty have opened Indian capital markets to higher international exposure by creating a financial corridor. The deal between the exchanges led to a US$ 9.1 billion open interest in NSE futures and options combined on the first day in the Gift city with NSE handling the trades and SGX clearing and settling the trades.”