India’s Forex reserves touch all-time high of $612.73 billion

In the week ended 16^th July, India’s foreign exchange reserves rose by $835 million to touch a record high margin of $612.73 billion. In the week ended 9^th July the reserves had surged to $611.895 billion from $1.883 billion.

Highlights

• The increase in Forex reserves was due to the rise in foreign currency assets (FCA). This was shown in the data of Reserve Bank of India.
• In the reporting week FCA rose to $568.748 billion from $463 million.
• Expressed in terms of dollar, foreign currency assets also include the effect of depreciation or appreciation of all the non-US units like pound, euro and yen which are held in the foreign exchange reserves of the country.
• In the reporting week gold reserves were up by $377 million to reach $37.333 billion.
• The special drawing rights (SDRs) that are held with the International Monetary Fund (IMF) were up by $1 million to reach $1.548 billion.
• In the reporting week India’s reserve position with the IMF declined by $7 million to fall to $5.1 billion.

Forex Reserves

Foreign exchanges are the assets which are held by a country’s central bank, RBI in India. These reserves are used to influence monetary policy and back liabilities of a country. Holding of foreign reserves by a country’s central bank is a common practice, and it is mainly done so that the government has backup funds to be used during emergencies.

Reserve Bank of India

RBI is the central bank of India and it was established on 1^st April, 1935. It’s headquarter is located in Mumbai and the current governor of RBI is Shaktikanta Das.

Month: Current Affairs - July, 2021