India’s Forex Reserves Reach Record High
New Delhi, October 4: India’s foreign exchange reserves have reached a new milestone, surpassing USD 700 billion. As of September 27, the reserves increased by USD 12.588 billion, totaling USD 704.885 billion, according to the Reserve Bank of India (RBI).
Breakdown of Reserves
The largest portion of these reserves, foreign currency assets, stands at USD 616.154 billion. Gold reserves are valued at USD 65.796 billion. These reserves are crucial for protecting the Indian economy from global financial shocks.
Annual Growth
In 2023, India added approximately USD 58 billion to its reserves, contrasting with a USD 71 billion decline in 2022. The reserves are now sufficient to cover over a year of projected imports.
RBI’s Role
The RBI manages these reserves, primarily held in US Dollars, Euros, Japanese Yen, and Pound Sterling. It intervenes in the forex market to maintain stability, buying dollars when the rupee is strong and selling when it is weak. This strategy has helped stabilize the rupee, making Indian assets more attractive to investors.
Doubts Revealed
Forex Reserves -: Forex reserves are like a big savings account for a country, holding foreign currencies, gold, and other assets. They help the country pay for things it buys from other countries.
USD 704.885 billion -: This is a very large amount of money, measured in US dollars, showing how much India has saved in its foreign exchange reserves.
RBI -: RBI stands for the Reserve Bank of India, which is like the boss of all banks in India. It helps manage the country’s money and keeps the economy stable.
Foreign Currency Assets -: These are parts of the forex reserves that are held in different foreign currencies, like US dollars or Euros, which India can use to trade with other countries.
Gold Reserves -: Gold reserves are the amount of gold that a country keeps as part of its forex reserves. Gold is valuable and can be used in times of financial need.
Imports -: Imports are goods and services that India buys from other countries. Forex reserves help pay for these imports.
Market Stability -: Market stability means keeping the economy steady and predictable, so there are no big ups and downs in prices or money value.