India's foreign exchange reserves experienced a significant increase of $6.99 billion, reaching a total of $692.72 billion for the week ending May 23, 2025, according to data released by the Reserve Bank of India (RBI) .
Foreign Currency Assets (FCA): The largest component of the reserves, FCAs rose by $4.52 billion to $586.17 billion. These assets are influenced by the valuation changes of major currencies like the euro, pound, and yen against the US dollar .
Gold Reserves: Increased by $2.37 billion, bringing the total to $83.58 billion .
Special Drawing Rights (SDRs): Rose by $81 million to $18.57 billion .
IMF Reserve Position: Improved by $30 million, totaling $4.40 billion .
This surge follows a previous week's decline of $4.89 billion, highlighting the volatility and responsiveness of India's forex reserves to global economic conditions .
The robust increase in reserves enhances India's financial stability, providing the RBI with greater flexibility to manage currency volatility and external economic shocks.
Ask Anything, Know Better
1 day ago WHAT IS FAR? The Fully Accessible Route (FAR) is a regulatory framework introduced by the Reserve Bank of India (RBI) and the Government of India in March 2020 to attract more foreign investment into Indian government securities (G-Secs). KEY FEATURES Feature Details Purpose To enable unrestricted access for Non-Resident Investors (FPIs) Eligible Securities Specific Government of India bonds are designated under FAR Access Type No...
3 days ago SUMMARY India's GDP growth for the fourth quarter of FY2024–25 is projected to be around 7%, driven by robust rural demand, increased government spending, and improved agricultural output. However, the full fiscal year growth is expected to settle at approximately 6.3%, slightly below earlier estimates. Q4 FY2024–25 Growth Estimates Reuters projects 6.7% growth, citing stronger rural consumption and state expenditure, despite subdued private investment. ICRA estimates...
May 26 DEFINITION Seigniorage is the profit a government earns by issuing currency, particularly the difference between the face value of money and its production cost. It is also the revenue the government earns by printing money instead of borrowing or taxing. Seigniorage = Face Value of Currency − Cost to Produce & Distribute It EXAMPLE It costs the RBI about ₹3 to print a ₹100 note. So, the seigniorage = ₹100 − ₹3 = ₹97. That ₹97 is essentially profit for the government, because...
May 26 DEFINITION Primary Dealers (PDs) are financial institutions authorized by the Reserve Bank of India (RBI) to underwrite and participate directly in the auction of government securities, including Treasury Bills (T-Bills) and Dated Securities (G-Secs). The Reserve Bank of India (RBI) designates certain institutions as Primary Dealers (PDs) to strengthen the government securities (G-Sec) market. TYPES These PDs are categorized into two types: Standalone Primary Dealers: Non-bank entities that...
May 20 WHAT IS A COOPERATIVE BANK? A cooperative bank is a financial institution that is owned and controlled by a group of people who are also customers of the bank. These banks follow the cooperative principle of one person, one vote, and provide services such as savings and loans to both members and non-members. Cooperative banks were initially established to provide credit to members and liberate the underprivileged from the clutches of unscrupulous moneylenders who demanded exorbitant interest rates. Cooperative...
May 19 WHAT? The Bank for International Settlements (BIS) is often referred to as the "central bank for central banks." It plays a key role in supporting global financial and monetary stability. It's headquarters is located in Basel, Switzerland. It also has representative offices in Hong Kong and Mexico City. Lets see what all does the BIS do? FUNCTIONS Acts as a Bank for Central Banks : In this role it holds deposits and manages accounts for over 60 central banks. BIS Offers asset management,...
May 13 WHAT? The World Trade Uncertainty Index is a global economic indicator developed by the International Monetary Fund (IMF) to measure uncertainty related to trade policy across countries and over time. It is published by International Monetary Fund (IMF) and Updated quarterly, available on the IMF's official website. What Does It Measure? The WTU Index quantifies trade-related uncertainty by analyzing the frequency of terms related to "trade" and "uncertainty" in the Economist...
May 10 Feature Extended Fund Facility (EFF) Stand-By Arrangement (SBA) Rapid Financing Instrument (RFI) Main Purpose Medium- to long-term assistance for countries with structural issues and persistent balance of payments (BoP) problems. Short-term help to resolve temporary BoP gaps, including shocks like commodity price swings. Immediate financial support for countries facing urgent BoP needs (e.g. disasters, pandemics). Launched 1974 1952 (modern...
April 24 The Reserve Bank of India at times uses terms like withdrawal of accommodation, neutral, hawkish and others. What does this all mean? RBI’s ‘NEUTRAL’ means A neutral stance indicates that the RBI maintains flexibility in adjusting policy rates based on prevailing economic conditions. This means that the central bank is open to either increasing or decreasing interest rates, depending on data related to inflation and economic growth. The neutral stance is generally adopted when both...
March 31 Introduction Tri-party repo” means a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction. It is also known as TREPS. Purpose of Tri-party Repo? The aim to introduce Tri-party repo was to improve liquidity in the corporate bond repo market, thereby providing an...
Comments
Write Comment