New Delhi. Good news has emerged for India's economy. There has been a big increase in the country's foreign exchange reserves for the second consecutive week. Forex reserves increased by $9.905 billion to $716.907 billion in the week ended August 14. Earlier in the week of August 7 also, the reserves had increased by $ 14.136 billion.
Increase in foreign currency assets also
According to RBI data, Foreign Currency Assets (FCA) increased by $ 7.225 billion in the latest week. After this their total value became 581.851 billion dollars. Apart from the dollar, it also includes major foreign currencies like euro, yen and pound.
Gold reserves also supported
A good increase was also recorded in India's gold reserves. During the week its value increased by $ 2.679 billion to reach $ 111.417 billion. That is, the rising value of gold along with foreign currency assets also contributed to strengthening the total reserves. At the same time, there was a slight decline in India's Special Drawing Rights (SDR) and it stood at $ 18.740 billion. India's reserve position in IMF increased by $5 million to $4.899 billion.
Why is Forex Reserve important for the country?
Foreign exchange reserves are considered important for the economic strength of a country. India requires foreign exchange to import crude oil, electronic goods and many essential commodities. In such a situation, having adequate reserves helps in handling external payments.
Apart from this, there is pressure on the rupee due to increase in demand for dollar in the international market. In such a situation, RBI can try to maintain stability in the market by using its foreign exchange reserves as per need.