India's forex market has the required depth and liquidity to weather pressures, notes RBI

The Indian rupee (INR) has moved in an orderly manner and performed relatively better compared to its peers even in the recent volatile period, reflecting strong macroeconomic fundamentals, adequate foreign exchange buffers and depth of our foreign exchange market, RBI noted in its monthly May bulletin. Indias forex market has the required depth and liquidity to weather pressures, such as seen in the last few months, RBI noted. Indias current account deficit (1.3 per cent of GDP during April-December 2024) remains eminently within manageable limits, supported by robust services exports and private remittances. Moreover, as on May 9, 2025, Indias foreign exchange reserves stood at US$ 690.6 billion, providing a cover for more than 11 months of goods imports and 96 per cent of external debt outstanding at end-December 2024.

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