India's forex reserves grow by $2.4 billion as foreign investors return

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India's forex reserves grow by $2.4 billion as foreign investors return

Foreign exchange reserves grew by $2.4 billion during the week ending July 29 after declining for four consecutive weeks as foreign portfolio investors returned to Indian markets as net investors. India's foreign exchange reserves were placed at 573.9 billion as of July 29, 2022 said RBI governor Shaktikanta Das in his monetary policy statement, a few hours ahead of the official release time of 5.00 pm on Friday. The Reserve Bank has used its foreign exchange reserves accumulated over the years to curb the exchange rate, Das said. The latest reserves levels reversed the trend of depletion for four consecutive weeks in a row. It fell from $593 billion as of June 24 to 571.5 billion as of July 22. Foreign portfolio investors who were seen pulling out of Indian markets because central banks in the United States started tightening rates as inflation in these economies started to rise. The net FPI flows have been positive for the last three days, said Gaura Sengupta chief economist at. The relief may be temporary Asian central banks have used foreign exchange reserves to defend their currency. India, Thailand and Korea have seen their reserves drop by a combined $115 billion this year as they sold dollars to curb currency declines, according to Bloomberg news. They are facing a tighter relationship between external financial conditions, capital outflows, currency depreciations and reserve losses. The governor said in his statement that some of them are facing mounting burdens of debt. Despite the resultant drawdown, India's foreign exchange reserves remain the fourth largest in the world. India is much better than emerging market economies as far as external sector strength is concerned, according to RBI.