New Delhi, June 5: The Reserve Bank of India (RBI) Governor Sanjay Malhotra announced that India’s economy remains relatively strong despite global challenges. He revealed that the country’s foreign exchange reserves have reached a robust $682.2 billion, providing ample security against external economic shocks.
According to the RBI Governor, the current forex reserves are capable of covering nearly 11 months of imports and account for over 89% of the country’s external debt. This situation reflects India’s economic resilience and financial stability.
During the much-anticipated monetary policy announcement, Governor Malhotra stated, “India’s foreign exchange reserves stand at a very strong level of $682.2 billion. This reserve is adequate by standard measures, covering approximately 11 months of imports and more than 89% of external debt.”
Regarding exchange rates, the RBI Governor clarified that the central bank does not target a specific level or range for the rupee. He emphasized that exchange rates are determined by market forces.
However, he acknowledged that rising global uncertainties and speculative pressures can sometimes lead to excessive volatility in the market. In such situations, the RBI aims not to prevent market-based changes but to manage extreme instability and curb disorderly market activities.
Sanjay Malhotra further explained that ongoing tensions in the Middle East and global economic uncertainties are impacting markets worldwide. This influence can also be seen in India’s growth rate and inflation forecasts. Nevertheless, the Indian economy remains in a relatively strong position.
He stated that the RBI is fully vigilant in maintaining market stability and will utilize all available regulatory and market-based tools when necessary. The central bank is also focused on formulating policies that not only address challenges but also strengthen India’s broader economic foundation.
Additionally, the RBI has announced significant measures to promote foreign capital investment. The Governor revealed that under the Fully Accessible Route (FAR), all new government securities with maturities of 15, 30, and 40 years will now be included. Previously, only government securities with a maturity of up to 10 years were covered under this scheme.
Moreover, to encourage external commercial borrowing (ECB) by public sector undertakings (PSUs), a concessional foreign exchange swap facility will be available until September 13, 2026. This is expected to boost foreign capital inflows and assist companies in raising funds at lower costs.
As widely anticipated, the RBI maintained a neutral stance by keeping interest rates unchanged, reflecting unwavering confidence in domestic growth and demand. The RBI also acknowledged the presence of global uncertainties and will closely monitor these for future policy actions.
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