India’s foreign exchange reserves surpassed Russia becoming the fourth largest in the world.

As per the data of the Reserve Bank of India, the country's FX reserves stood at $ 580.299 billion as of March 05, 2021, dropping by $ 4.255bn. However, it managed to surpass Russia’s $ 580.1bn foreign exchange reserves.

Meanwhile, India’s gold reserves also declined by $ 1.206bn to $ 34.215bn in the reporting week, as per the data. Whereas, India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) fell by $ 11mn to $ 1.506bn in the reporting week.

As per Bloomberg, the FX reserves are enough to cover India’s 18 months of imports. The reserves have shot up on account of increased inflows into the local stock market and foreign direct investment (FDI) and a current account surplus.

“India’s various reserves adequacy metrics have improved significantly, particularly in the last few years," Kaushik Das, chief India economist at Deutsche Bank, said before the latest data were released. “The healthy FX reserves position should give enough comfort to RBI for dealing with any potential external shock-driven capital-stop or outflows in the period ahead."

Last year, the Indian central bank purchased a net $88 billion in the spot forex market.