India's forex reserves rose substantially by $5.942 billion to touch a life-time high of $507.644 billion in the week to June 12, helped by a significant jump in the foreign currency assets (FCA), RBI data showed.
In the previous week ended June 5, the foreign exchange reserves had crossed the half-a-trillion mark for the first time after it surged by a massive $8.22 billion and reached $501.703 billion, according to the weekly data released by the Reserve Bank of India.
In the reporting week, the foreign currency assets, a major component of the overall reserves, rose by $5.106 billion to $468.737 billion.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
According to economists, the increase in foreign exchange reserves is due to higher capital inflows and also due to the narrowing current account deficit as trade activities have come to a standstill due to the disruptions caused by the COVID-19 pandemic.
This amount of forex reserves will be sufficient to cover the country import for one year, they said.
The gold reserves in the reporting week rose by $821 million to $33.173 billion, the RBI data showed.
The special drawing rights with the International Monetary Fund (IMF) was up by $12 million to $1.454 billion.
The country's reserve position with the IMF also rose by $3 million to $4.280 billion during the reporting week, the data showed.