An SDR booster from IMF puts India’s forex kitty at $633 billion

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India's foreign exchange reserves rose to a record $633 billion in the week ended August 27 after the International Monetary Fund (IMF) made an allocation of 12.57 billion special drawing rights (SDRs), equivalent to $17.86 billion, to the country on August 23. The fresh SDR allocation to the Reserve (RBI) follows the recent G-20 decision to increase IMF’s lending capacity by $650 billion to fight the economic fallout of Covid-19. India’s allocation is in proportion to its IMF quota, 2.75%. Reserves rose $16.6 billion from the previous week — among the highest increases in a week since the 2008 financial crisis. At $633 billion, India’s reserves are reckoned to be fourth largest after Japan, China and Switzerland. “The additional SDR allocation to India comes at a time when RBI’s foreign reserves are already very large and adequate,” said Rahul Bajoria, chief India economist at Barclays Capital. “This should boost RBI’s confidence around reserve adequacy a
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