India's forex reserves up at $561.2 billion as on December 2, RBI Governor Shaktikanta Das says

India's foreign exchange reserves jumped to $561.2 billion as on December 2. Reserve Bank of India Governor Shaktikanta Das said today.

"The size of our forex reserves is comfortable and has increased", Das said while announcing the monetary policy decisions.

The forex reserves has thus risen for four straight weeks and improved from $550.14 billion for the week ending Nov 25, reflecting the impact of recent overseas currency purchases by the central bank amid rising global appetite for local growth assets.

Ahead of the policy review in September, India’s foreign exchange reserves had dropped to $545.65 billion, which was then the lowest level since Oct 2, 2020. The reserves fell further to an over two-year low of $524.52 billion for the week ending Oct 21, depleting by $117.93 billion from the record high of $642.45 billion seen on September 3 last year.

However, experts opine that the future pace of increases in forex reserves may not be sharp. China is re-emerging as a competitor for international investors’ funds. As China begins to ease curbs and move to focus on the economy, it’s beaten down valuations vis a vis India’s steepest valuations could turn out to be India’s disadvantage and temper down flows.