India's forex reserves rise to record $344.6bn

India's foreign exchange reserves have increased to a record high in the week ended 24 April, as the central bank looks to fortify the economy against possible troubles related to the weakness in the rupee and current account deficit.

The Reserve Bank of India (RBI) said the country's foreign exchange reserves rose $1.4bn (£917m, €1.2bn) to reach $344.6bn, a new record for the Asian nation, which is expected to grow at the fastest pace among developing nations in 2015.

The RBI has added about $25bn to its forex reserves since January, as overseas investors poured in large amounts of money in Indian debt and equities market in line with the country's expected high growth.

India's foreign currency assets, the prime component of forex reserves, now stand at $320bn, having increased by $1.4bn in the reporting week, according to the central bank. Other reserves comprise of gold, special drawing rights (SDRs) and reserve tranche position in the International Monetary Fund (IMF).

While gold reserves and the reserve tranche position in the IMF remained unchanged in the reporting period at $19.03bn and $1.29bn, respectively, SDRs increased by $0.2m to $4bn.

Finance Minister Arun Jaitley earlier said India's forex reserves are helping the country to check the weakness in the rupee against the US dollar.

"India's forex reserves and laws to avert flight of currency have supported the rupee," he said.

Credit rating agency Moody's earlier upgraded outlook for India to positive from stable, but it retained the credit rating at Baa3.

India targets an economic growth rate of 8.5% for fiscal year 2015-16, compared to 7.2% in fiscal year 2014-15. The World Bank forecast a growth rate of 7.9% for the economy.