India's foreign exchange reserves surge to touch another peak of USD 670.86 billion

New Delhi: India's foreign exchange reserves, in the recently concluded financial year 2023-24, increased the highest among major reserves-holding countries globally, asserted the Economic Survey tabled in Parliament on Monday.

During the financial year, the foreign exchange kitty had increased by USD 68 billion.

A moderation in the current account deficit (CAD) amidst large capital inflows into India enabled the addition of foreign exchange reserves in 2023-24, the government said in the Economic Survey.

The buffer of foreign exchange reserves insulates domestic economic activity from global spillovers.

"These reserves act as a cushion and provide liquidity, ensuring India can meet its external obligations," the Economic Survey read.

The reserves stood at USD 653.7 billion on June 21, 2024, enough to cover more than 10 months of imports projected for 2024-25 and more than 98 per cent of total external debt outstanding at the end of March 2024.

India's foreign exchange reserves have been touching fresh lifetime highs on and off.

Forex reserves, or foreign exchange reserves (FX reserves), are assets held by a country's central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.

The country's foreign exchange reserves last touched their all-time high in October 2021. Then they fell, somewhat due to costly exports.

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament today. The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and formulated under the supervision of the chief economic adviser, gives insights into the state of the economy and various indicators of 2023-24 (April-March) and some outlook for the current year.

Sitharaman is set to present the Union Budget for 2024-25 in Parliament tomorrow. With this Budget presentation, Sitharaman is set to surpass the record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964 as finance minister. Sitharaman's upcoming budget speech will be her seventh.