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Forex reserves cross $600 billion for first time on foreign flows.

The country's foreign exchange reserves surpassed USD 600 billion for the first time on Friday, with an increase of USD 6.842 billion in the week ending June 4.

The reserves reached a record EUR 605.008 billion in the week under review, helped by the rise in FCA, an important part of the overall reserves, according to the Reservation Bank of India's weekly data (RBI).

RBI Governor Shaktikanta Das said that reserves were close to USD 600 billion during last week's announcement on monetary policy.

"This gives us a great deal of confidence in tackling the challenges that arise from global turmoil if they happen in the future," Das said.

Reserves increased by $5.271 billion to $598.175 billion in the previous week ended May 28, 2021. The data showed that FCA jumped to USD 560,890 billion by USD 7,362 billion during the reporting week.

The effect of appreciation or depreciation of the non-US units such as the euro, pound and yen held in the foreign reserve is included in foreign currency assets, expressed in dollars. Gold reserves declined by USD 502 million to USD 37.614 billion.

The International Monetary Fund (IMF) has decreased Special Drawing Rights (SDRs) by US$1 to US$1,513 billion. The reserve position of the country with the IMF decreased in the week under discussion also by 16 million USD to 5 billion USD, according to the data.

Care Ratings chief economist Madan Sabnavis commenting on the development said that high foreign-exchange reserves are a positive sign as they are strong enough to strengthen the country's external position.

This quantity of kitty is, according to him, enough to cover the imports of the Country during 15-18 months. The high forex reserves indicate that RBI intervenes at a very strong pace in the market in order that the rupee does not appreciate. Kotak Securities Vice President Anindya Banerjee (Currency and interest rate resource research).

"The higher capital inflows and the likely current account excess we have had after a long time can be attributed to this (forex reserve rise)," Sabnavis said.