Continuing the volatility after Britain voted to leave the European Union, India's foreign exchange reserves hit a record high of USD 363.83 billion as of the week ended June 17, shoring up the country's defences.
As per the market analysts the FX reserves rose mainly on currency valuations. The Reserve Bank of India has also been steadily building dollars to help meet USD 20 billion in expected outflows in September tied to maturing dollar deposits or the foreign currency non-resident (bank) deposits raised during 2013 when India was in midst of a currency crisis.
The weekly arrived amid the downfall of Indian rupee to as low as 68.22 to the dollar, its lowest since March 1 and not far from a record low of 68.85 hit in August 2013, during the crisis.
The currency however cut some of its losses to end at 67.96/97, compared with its close of 67.25 on Thursday.
Reserves are likely to see some decline in coming months due to the FCNR redemptions. Over the medium term, we expect reserves to keep expanding, boosted by sustainable inflows such as FDI (foreign direct investment).
Talking about Brexit' consequences on India, RBI Governor Raghuram Rajan and Finance Minister Arun Jaitley said India was ready to deal with the aftermath of the Brexit vote, citing its solid economy and planned government reforms.
Rajan also touted the country's FX reserves as key defence against foreign investor selling.