Sixth straight weekly rise reflects RBI’s strategy to bolster reserves amid market fluctuations.
MUMBAI – India’s foreign exchange reserves (INFXR=ECI), opens new tab rose for a sixth straight week to hit a lifetime high of $645.58 billion as of Mar. 29, data from the central bank showed on Friday.
The reserves rose by $2.95 billion in the reporting week, after having risen by a total of $26.5 billion in the previous five weeks.
The Reserve Bank of India (RBI) intervenes in the foreign exchange market to curb excess volatility in the rupee.
Changes in foreign currency assets are caused by the RBI’s intervention as well as the appreciation or depreciation of foreign assets held in the reserves.
Foreign exchange reserves also include India’s reserve tranche position in the International Monetary Fund.
Despite India’s strong growth and inflows into equity and debt markets, the central bank has been absorbing inflows to build reserves.
“It is our prime focus to build a strong umbrella, a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns or when it rains heavily,” RBI Governor Shaktikanta Das said on Friday.
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In the week that the foreign exchange data pertains, the rupee had hit a record low of 83.45 against the dollar, but clocked minor weekly gains.
US criticism of Chinese overcapacity rehashes ‘China threat’ rhetoric: Xinhua
US Treasury Secretary Janet Yellen comments on China’s excess manufacturing capacity seek to rehash “China threat” rhetoric and appear to create a pretext for more protectionist policies from the US, Chinese state media said.
Such comments seek to undermine China’s domestic growth and international cooperation, and Washington should focus on fostering innovation and competitiveness within its own borders instead of resorting to fear-mongering, state news agency Xinhua said in an editorial late on Friday.
Yellen told US businesspeople in China’s southern export hub of Guangzhou on Friday that concerns are growing over the global economic fallout from China’s excess manufacturing capacity, making the issue the focus of her four days of meetings with Chinese officials.
Citing China’s overproduction of electric vehicles, solar panels, semiconductors and other goods that are flooding into global markets in the face of a demand slump in China’s domestic market, Yellen said this was not healthy for China and was hurting producers in other countries.
“Talking up ‘Chinese overcapacity’ in the clean energy sector also smacks of creating a pretext for rolling out more protectionist policies to shield US companies,” Xinhua said.
“After all, it is now known by the world that Washington will not hesitate to show its protectionist teeth under the guise of national security in areas where its supremacy is challenged.”
Yellen met with Vice Premier He Lifeng and Guangdong Province Governor Wang Weizhong in Guangzhou after arriving in China late on Thursday.
She is to travel on Saturday to Beijing, where she will meet officials including Premier Li Qiang and People’s Bank of China Governor Pan Gongsheng through Monday, according to a Treasury press advisory.
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