New Delhi: India's foreign exchange reserves surged by USD 5.84 billion to touch a fresh life-time high of USD 327.88 billion in the week ended January 30, the Reserve Bank said on Friday.
The previous record high was $322.13 billion for the week ended January 16 after the reserves declined marginally by USD 97.9 million.
The increase in reserves is mainly due to the foreign investors continued to be hefty buyers of bonds and shares because of expectations for economic reforms from Prime Minister Narendra Modi's government and the central bank's success in reducing inflation.
Foreign institutional investors poured in $26.4 billion into Indian bonds and another $16 billion into shares in 2014.
According to RBI data, the surge in reserves was on account of higher foreign currency assets (FCAs), which forms a major constituent of overall reserves.
FCA rose by USD 5.814 billion to USD 303.325 billion in the reporting week.
The RBI has also been keen to build up its defences after the country suffered in 2013 the worst rupee turmoil since a balance of payment crisis a decade ago because of dwindling reserves and a high current account deficit.
Indian rupee is among the best performing Asian currencies so far this year, with a gain of around 2 per cent against the dollar, supported by capital inflows and expectations the Reserve Bank of India will ease policy to encourage growth.
At the monetary policy review on February 3, RBI Governor Raghuram Rajan said the central bank is not targeting a particular value of rupee. He said that the RBI has intervened in the foreign exchange market to protect rupee's volatility.
Dr Rajan also pointed out to the improving current account deficit numbers of the country. He said that the current account deficit of this fiscal is likely to fall to 1.3 per cent of GDP and could go even lower in the next fiscal. India's current account deficit has narrowed from a record high of 4.8 per cent of GDP in the 2012/13 fiscal year as the government has imposed stringent curbs on gold imports.
The country's gold reserves remained unchanged at USD 19.377 billion.
