Foreign Exchange Reserve : India Status
India’s foreign exchange reserves surged by $2.98 billion to $619.07 billion recently.
- Foreign Exchange Reserves (also called Forex Reserves) are reserve assets held by a central bank in foreign currencies.
- Foreign assets comprise assets that are not denominated in the domestic currency of the country.
- These may include foreign currencies, bonds, treasury bills, and other government securities.
- Reserves are denominated and expressed in the US dollar, which is the international numeraire for the purpose.
- RBI is the custodian of the foreign exchange reserves in India.
- India’s foreign exchange reserves comprise of;
- Foreign currency assets (FCAs): These are maintained in currencies like the US dollar, euro, pound sterling, Australian dollar, and Japanese yen.
- Gold
- SDR (Special Drawing Rights): This is the reserve currency with the IMF.
- RTP (Reserve Tranche Position): This is the reserve capital with the IMF.
- The biggest contributor to India’s Forex reserves is foreign currency assets, followed by gold.
