India's forex reserves jump $8.22 billion, crosses $500 billion mark for the first time

New Delhi: India's foreign reserves crossed the $500 billion mark on Friday for the first time after registering a massive surge of $8.22 billion in the week ended June 5 aided by higher foreign inflows.

According to RBI's weekly statistical data, the overall forex reserves increased to $501.703 billion on June 5 from $493.480 billion reported for the week ended May 29.

India`s forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and India`s reserve position with the International Monetary Fund (IMF).

The FCAs, the largest component of the forex reserves, climbed by $8.422 billion to $463.630 billion. Although, the value of the country`s gold reserves decreased by $329 million to $32.352 billion.

The SDR value rose by $10 million to $1.442 billion. While, the country's reserve position with the IMF increased by $120 million to $4.278 billion.

The Principal Economic Advisor in the Ministry of Finance Sanjeev Sanyal in a tweet said, "India's Foreign Exchange Reserves hit USD501.7 billion. As I have been saying in recent weeks, demand suppression (such a lockdown) would push the INR to appreciate after an initial capital outflow."

He added, "Now, as we open the economy to remove demand suppression, and push up credit growth, we will both revive imports and foreign capital inflows. The point is that demand identities imply macro-dynamics that is quite different from what naive forecasters suggest." 

This amount of foreign exchange reserves is equivalent to a year's imports.