India’s foreign reserves touched USD 402.5 billion in September says DBS

Vastavam web: India’s foreign reserves, which touched a record USD 402.5 billion in September, are high enough to cushion the country against the external vulnerabilities, the Development Bank of Singapore (DBS) said today.The import cover (on total reserves minus gold) is better than what is seen during the 2013 taper tantrum, said DBS in its report on Indian economy.The record high reserve of USD 402.5 billion in September 2017 is a long way since reserves bottomed out at USD 275 billion in August 2013, at the worst point of the Fed taper tantrum, it pointed out.

Compared to its peers in Asia ex-Japan, India’s foreign reserves rose the most since the taper tantrum, noted the Singapore-based bank.”Beyond the strong year-to-date jump, we expect the pace of reserves accumulation to moderate due to slower incremental portfolio flows and wider current account deficit,” the bank said.Incremental dollar inflows are likely to ease after a strong first half of this year, and foreign portfolio inflows have moderated in the second half.