Foreign exchange reserves of India
The Foreign exchange reserves of India are mainly composed of US dollar in the forms of US government bonds and institutional bonds.[1] The main component is Foreign currency assets. As per the data furnished by the Reserve Bank of India in its weekly statistical supplement, India's total foreign exchange reserves stands at US$353.46 billion for the week ended July 31, 2015.[2][3][4] In this, Foreign currency assets(FCAs) was US$329.87 billion, while gold reserves was US$18.25 billion. Gold reserves in India constitute nearly 15 percent of forex. India is, coincidentally the world's largest gold consuming nation.[2] India is at 9th position in List of countries by foreign-exchange reserves , just below South Korea , Brazil and Russia.[5][6] The Economic survey of India 2014-15 said India could target foreign exchange reserves of US$750 billion-US$1 trillion.[7] Foreign exchange reserves act as the first line of defence for India in case of economic slowdown, but acquisition of reserves has its own costs.[8]
Composition
Reserve Bank of India Act and the Foreign Exchange Management Act, 1999 set the legal provisions for governing the foreign exchange reserves. Reserve Bank of India accumulates foreign currency reserves by purchasing from authorized dealers in open market operations. Foreign exchange reserves of India act as a cushion against rupee volatility once global interest rates starts rising.[9]
Statistics
- In 1980, India had foreign exchange reserves of over U$7 billion, more than double the level (U$2.55 billion) of what China had at that time.[5]
- India was forced to sell dollars to the extent of close to U$35 billion in the spot markets in Financial Year 2009 due to 22% depreciation in rupee (against the dollar) in the same fiscal year 2009.
- Foreign exchange reserves of India reached milestone of $100 billion mark only in 2004.
- In 2009, India’s purchase of 200 tonnes of gold from the International Monetary Fund, worth US$6.7bn (€4.57bn, £4.10bn).[10]
See also
- List of countries by foreign-exchange reserves (excluding gold)
- Foreign exchange reserves
- List of countries by GDP (nominal)
- Economic survey of India
- List of countries by foreign-exchange reserves
- Foreign exchange reserves of China
References
- ↑ Y V Reddy: India’s foreign exchange reserves – policy, status and issues – May 10, 2002
- 1 2 "India's forex reserves lose shine as gold prices plummet".
- ↑ http://economictimes.indiatimes.com/news/economy/finance/forex-reserves-rises-918-million-to-353-5-billion/articleshow/47555240.cms
- ↑ "India's forex reserves touch new record high".
- 1 2 "Surging forex reserves to help improve economic outlook".
- ↑ "Look How Rich India's Become Under New Prime Minister Modi".
- ↑ "RBI Monetary Policy $1 trillion forex reserves: A pipe dream".
- ↑ "Costs Involved In Increasing Forex Reserves: RBI".
- ↑ "India’s forex reserves will cushion Rupee volatility: Rajan".
- ↑ "India flexes its foreign reserve muscles".
External links
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