India’s Forex Reserves Crossed $600:
India’s forex reserves crossed $600 mark for the first time and as on June 4, it stood at $605 billion. With this, India equals Russia as the fourth largest reserve holder worldwide
- India’s forex reserve was $605.008 billion while for Russia it was $605.2 billion.
- It took a year for reserves to rise by $100 billion.
- Huge forex reserves have improved India’s import cover substantially.
- By December 2020, foreign exchange reserves cover of imports increased to 18.6 months.
Foreign exchange or Forex reserves:
- Forex is assets on reserves that are held by a central bank in foreign currencies. It includes bonds, treasury bills, and other government securities.
- Most of the foreign exchange reserves are held in U.S. dollars.
- These reserves serve several purposes and ensure that the central bank has backup funds in case national currency rapidly becomes insolvent or devaluate.
- India’s Forex Reserves include- Gold, Foreign Currency Assets, Special Drawing Rights, and Reserve position with International Monetary Fund (IMF).