Forex reserves hit new high of $ 427.67 billion

The reserves nearing $ 428 billion can take care of imports for almost 10 months, according to market experts.

India's foreign exchange reserves swelled by $ 1.262 billion to scale a fresh high of $ 427.678 billion in the week to June 28, boosted by higher foreign portfolio investments and a stable rupee, RBI data showed on Friday.

In the previous reporting week, the reserves had surged by $ 4.215 billion to $ 426.42 billion.

During the week, foreign currency assets, which are a major component of the overall reserves, increased by $ 1.252 billion to $ 399.902 billion.

The reserves nearing $ 428 billion can take care of imports for almost 10 months, according to market experts.

Forex reserves are one of the key revenue earning sources for the central bank, which invests the money in foreign government bonds and also with the IMF and other secure investment classes.

A portion of the forex kitty is also used to shore up the gold reserves, which the RBI had increased by over 8 tonnes last fiscal after decades.

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

Gold reserves remained unchanged at $ 22.958 billion, according to the RBI data.

Special drawing rights with the International Monetary Fund (IMF) increased by $ 3 million to $ 1.456 billion.

The country's reserve position with the fund also rose by $ 7 million to $ 3.361 billion.

Photograph: Reuters