India’s Forex Reserves Hit Record High of USD 681.688 Billion
New Delhi, India – India’s foreign exchange reserves have reached a new record high of USD 681.688 billion, an increase of USD 7.023 billion during the week ending on August 23, according to the Reserve Bank of India (RBI).
Details of the Increase
The previous record was USD 674.919 billion. In 2024 alone, the reserves have risen by approximately USD 60 billion. This buffer helps protect India’s economy from global shocks.
Breakdown of Reserves
According to the RBI, foreign currency assets (FCA), the largest part of the reserves, rose by USD 5.983 billion to USD 597.552 billion. Gold reserves increased by USD 893 million, totaling USD 60.997 billion.
Importance of Forex Reserves
India’s forex reserves are now enough to cover about a year of projected imports. In 2023, India added about USD 58 billion to its reserves, contrasting with a decline of USD 71 billion in 2022.
Role of the RBI
The RBI holds these reserves in various currencies like the US Dollar, Euro, Japanese Yen, and Pound Sterling. It monitors the forex market to maintain stability and prevent excessive volatility in the exchange rate.
Doubts Revealed
Forex Reserves -: Forex reserves are the money or other assets held by a country’s central bank, like the Reserve Bank of India, to back its currency and manage its economy.
USD 681.688 Billion -: This means that India’s foreign exchange reserves are worth 681.688 billion US dollars. A billion is a thousand million.
Reserve Bank of India -: The Reserve Bank of India (RBI) is the central bank of India. It manages the country’s currency and monetary policy.
Foreign Currency Assets -: These are assets held in foreign currencies, like US dollars or Euros, by the central bank. They help in international trade and economic stability.
Gold Reserves -: Gold reserves are the amount of gold held by the central bank. It is used as a store of value and to back the country’s currency.
Global Economic Shocks -: These are unexpected events that can affect the global economy, like financial crises or natural disasters. Having strong forex reserves helps a country handle these shocks better.
Imports -: Imports are goods and services that a country buys from other countries. Forex reserves help pay for these imports.
Intervenes in the forex market -: This means that the RBI buys or sells foreign currencies to keep the value of the Indian Rupee stable.
