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India’s forex reserves may have exceeded $600 billion milestone, says RBI Governor – Mint

RBI Governor Shaktikanta Das while announcing the Monetary Policy on Friday said that India’s forex reserves may have exceeded $600 billion mark. The Reserve Bank of India (RBI) actively engages in both purchases and sales in the foreign exchange market and its various segments, he said.

”The success of these efforts is reflected in the stability and orderliness in market conditions and in the exchange rate in spite of large global spillovers. In the process, strength is imparted to the country’s balance sheet by the accumulation of reserves,” Das added.

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, boosted by gold and currency assets, RBI data showed on Friday. The previous all-time high for the forex kitty was $590.185 billion for the week ended January 29, 2021.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

The Monetary Policy Committee voted unanimously to keep repo rate unchanged at 4% and maintain an accommodative stance. Reverse Repo Rate is maintained at 3.35%, MSF (Marginal standing facility) rate at 4.25% & Bank Rate at 4.25%.

“The MPC was of the view that at this juncture policy support from all sides is required to gain the momentum of growth that was evident in the second half of 2021 and to nurture the recovery after it has taken root,” Das said.

The rupee slumped 16 paise to 73.07 against the US dollar in opening trade on Friday after the Reserve Bank kept policy rates unchanged for the sixth time in a row.

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