Economics
World’s Fifth-Largest Reserves Pile Gives India Some Comfort
- Reserves have steadily increased to more than $500 billion
- Current account is in surplus, foreign investment has gained
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India has accumulated the world’s fifth-largest foreign exchange reserves at more than $500 billion, making it a bright spot in an otherwise dismal economy.
The reserves were bolstered by a rare current-account surplus in the first quarter, a return of inflows into the local stock market and foreign direct investment, including into a unit of Reliance Industries Ltd., India’s largest company by revenue. That allowed the central bank to mop up close to $25 billion in foreign exchange to add to its reserves in the quarter through June, according to analysts such as Anubhuti Sahay, chief India economist at Standard Chartered Plc in Mumbai.