Reaching the level of all time high till date, India's Foreign Exchange Reserves settle at 457.468 bn

Mumbai, January 04: India's foreign exchange reserves swelled by 2.520 billion USD to touch a record high of 457.468 billion USD in the week that ended on 27th December 2019. The RBI press release also informed that foreign currency assets, a major part of the overall reserves rose by 2.203 billion USD to 424.936 billion USD.

 

 

In the previous week, the reserves had surged by 456 million USD to end at 454.948 billion USD. Gold reserves increased by 260 million USD to end at 27.392 billion USD. India's special drawing rights with the International Monetary Fund, however dipped by 2 million USD to 1.441 billion USD, while the country's reserve position increased by 58 million USD to 3.7 billion USD.

 

India's forex reserves comprise Foreign Currency Assets, gold reserves, Special Drawing Rights (SDRs) and India's reserve position with the International Monetary Fund (IMF). The Economic survey of India 2014-15 said India could target foreign exchange reserves of US$750 billion-US$1 trillion. As of September 2018, India's foreign exchange reserves are mainly composed of US dollar in the forms of US government bonds and institutional bonds. with nearly 5 per cent of forex reserves in gold.

 

Reserves act as a shock absorber against factors that can negatively affect a currency's exchange rate, so a nation's central bank uses its currency reserves to help maintain a steady rate, buying or selling depending on which direction they want exchange prices to go.