Winning Bizness Desk
Mumbai. Good news has come at the Indian economy front. Global rating agency S&P has said that the Indian economy is ready to face some decline in its foreign exchange reserves, as its external position is very strong. Andrew Wood, Director (Asia Pacific Sovereign Ratings) of S&P Global Ratings said on Thursday that India has definitely been affected by the decline in terms of trade during the last six months. Due to this there has been a decrease in the Foreign Reserve Exchange, which is showing a decline.
No need to worry too much for India
Wood said in a webinar, "But we have to keep in mind and this context is really important that India's external balance is very strong. So this fall in margins in the balance sheet can certainly be offset over time.” He said that the rating agency feels that there is no need to worry too much for India.
Withdrawals of $30 billion in the first half
India's merchandise import bill has increased significantly with the monthly trade deficit hitting record highs in May, June and July, coupled with rising commodity prices in the world. In addition, monetary tightening at the global level has led to a reduction in foreign capital inflows. In the first half of 2022, about $ 30 billion has been withdrawn from India. Overall, due to this, the rupee has depreciated by 6 per cent in 2022. On July 19, for the first time, the rupee had gone above 80 against the dollar.
$2.4 billion in foreign exchange reserves
On July 29, India's foreign exchange reserves increased by $ 2.4 billion. Before that, a decrease was seen for four consecutive weeks. In the data released four weeks later, the Reserve Bank informed that India's foreign exchange reserves stood at $ 573.5 billion during the week ended July 29, 2022.