The foreign exchange reserves held by India have returned back to the $400 billion mark about five weeks after it fell below that total. This comes as changes in valuation standards have impacted the market.
The United States Treasury stated a month earlier that it would watch carefully as the Indian forex market continues to grow and gather the American dollar. The American government has been interested in how well the country’s currency had become popular in India.
But much of this growth comes amid a general sense of uncertainty over how well the American dollar could grow. This especially comes as the United States has been bearing with substantial issues with handling the ongoing situation in North Korea. The growth of the American dollar in India has become a vital factor to review.
The weekly reserves held by India went up by around $1.2 billion in the past week. This helped get the forex reserves back to over $400 billion, a total that the reserves have been hovering around over time.
The total reserve total in India had not shrunk dramatically but it had been struggling to get above the $400 billion mark due to how changes in the currency values have evolved.
Concerns Over Currencies
The Reserve Bank of India did not make any specific statements on why reserves were rising or why they had fallen in the past. Data from the RBI does suggest that the changes occurred due to the values of the individual currencies changing. This is especially the case with the British pound and Japanese yen.
But there have also been concerns over how the value of the American dollar might change as ongoing tensions between that country and North Korea continue to persist. The ongoing conflict between the two countries has made it to where the American dollar is not as strong as it used to be.
The acquisition of additional American dollar resources has helped India to grow its reserve and to make it more valuable. But by adding more of this currency, it makes it to where the American dollar might be too valuable to the market at large. This especially comes as there are concerns over how the currency might continue to change in value depending on what can come about with the United States and North Korea.
The reserves held by India currently cover around eleven months of imports. Around $31 billion has been added in forex reserves over the past year with a strong desire to continue to add to the growth. But it is uncertain as to what could occur as the country’s dependence on the American dollar continues to grow.
This development is vital as India has been growing as one of the top investors in the world in foreign currencies and has an economy that continues to grow. The potential for the Indian forex market to continue to grow and evolve is strong for people to watch for as the country continues to work on building its forex stores.