India’s Foreign Exchange Reserves Reach New High in 2023-24
India’s foreign exchange reserves saw a significant increase of USD 68 billion in the financial year 2023-24, as highlighted in the Economic Survey presented in Parliament. By June 21, 2024, the reserves stood at USD 653.7 billion, enough to cover more than 10 months of projected imports for 2024-25 and over 98% of total external debt as of March 2024.
The Economic Survey, tabled by Union Finance Minister Nirmala Sitharaman, attributed this growth to a moderation in the current account deficit and large capital inflows. The reserves act as a cushion, providing liquidity and ensuring that India can meet its external obligations.
Foreign exchange reserves are assets held by a country’s central bank, typically in reserve currencies like the US Dollar, Euro, Japanese Yen, and Pound Sterling. India’s reserves have been reaching new highs intermittently, with the last peak in October 2021.
The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs under the Ministry of Finance, offers insights into the state of the economy for 2023-24 and provides an outlook for the current year. Sitharaman is set to present the Union Budget for 2024-25 in Parliament tomorrow, marking her seventh budget presentation.
Doubts Revealed
Foreign Exchange Reserves -: Foreign exchange reserves are like a big savings account for a country, holding money in different currencies like dollars, euros, etc. It helps the country buy things from other countries and keeps the economy stable.
USD -: USD stands for United States Dollar, which is the currency used in the United States. It’s often used in international trade and finance.
Economic Survey -: The Economic Survey is a report that the government of India prepares every year. It tells us how the country’s economy is doing and what might happen in the future.
Finance Minister -: The Finance Minister is a person in the government who is in charge of money matters, like taxes and spending. In India, this person is Nirmala Sitharaman.
Current Account Deficit -: The current account deficit happens when a country spends more money on buying things from other countries than it earns from selling things to them. It’s like spending more money than you make.
Capital Inflows -: Capital inflows are when money comes into a country from other countries. This can happen when people invest in businesses or buy property in that country.
Global Economic Fluctuations -: Global economic fluctuations are changes in the world’s economy. These changes can affect how much things cost and how much money people have.
Union Budget -: The Union Budget is a big plan that the government makes every year. It shows how the government will earn and spend money in the coming year.
