RBI's foreign exchange reserves could be used up to $30 billion to support the Indian rupee
Forex reserves, often known as foreign exchange reserves (FX reserves), are assets kept by a country's central bank or monetary authority.
Read more : 24% growth witnessed in the central government’s advance tax revenues over the same period last year
It is typically stored in reserve currencies such as the US Dollar, Euro, Japanese Yen, and Pound Sterling.
It is used to back its liabilities, such as the native currency issued and reserves placed with the central bank by companies or the government.
Even though the government would have enough reserves to cover import costs for the next ten months, Deutsche Bank said on Thursday that the Reserve Bank of India (RBI) may utilise up to $30 billion from its more than $594 billion in foreign exchange reserves to defend the Indian currency.
Indian rupee trading near to its all-time high of 83.30 against the US dollar
According to the German brokerage, the Indian rupee is currently trading near to its all-time high of 83.30 against the US dollar, and the Reserve Bank is actively intervening in the foreign exchange market to reduce volatility.
At the closing of the day's trading, the Indian rupee increased by 5 paise to reach 83.06 against the dollar.
According to a report by Deutsche Bank, a drop in vegetable prices will cause headline inflation to drop significantly to 5% in September from 6.8% in August. The company also pointed out that crude price has risen globally by $95 per barrel recently.
Less Impact witnessed with rising crude oil prices
Due to approaching state elections and subsequent general elections, Indian consumers are unlikely to experience any effects from the rise in global crude prices, according to the report.
According to the report, the Union government reduced the cost of home cooking gas by up to 200 rupees a cylinder in August last week. This is expected to cause the consumer price index (CPI) to fall by 0.25%.
The research also stated that a 10% increase in oil prices would ideally result in a 0.30% decrease in consumer price inflation.
The brokerages maintained its 6.2% FY24 GDP growth prediction, stating that it is unlikely that domestic gasoline price increases will significantly influence growth estimates.
The firm said that due to the unusually favourable base impact, headline inflation could decrease below 4% in July–September 2024, and the RBI could consider a rate drop starting in April 2024.
OTT India updates you with the latest news, The Country’s no.1 digital news platform OTT India. Keeps you updated with national, and international news from all around the world. For more such updates, download the OTT India app on your Android and IOS device.
.