Indiaâ€™s Forex reserve up by $1.36 billion at $420.05 billion in May 2019Date: 18 May 2019 Tags: External Sector
According to recently released Reserve Bank of India (RBI) data, India’s foreign exchange (forex) reserves rose by US $1.368 billion to reach US $420.055 billion in the week to May 10, 2019. The rise was on account of rise in foreign currency assets.
Breakaway of forex reserves (in the reporting week)
- Foreign currency assets: It is major component of the overall reserves. It increased by US $1.358 billion to US $392.227 billion.
- Gold reserves: It remained unchanged at US $23.021 billion.
- Special drawing rights (SDRs) with the International Monetary Fund: It rose by US $3 million to US $1.454 billion.
- Reserve position with IMF: It also increased by US $7 million to US $3.351 billion.
They are reserve assets held by central bank of the country in foreign currencies. These reserve acts as buffer to be used in challenging times. They are also used as back liabilities and also to influence monetary policy. Almost all countries in world, regardless of size of their economy, hold significant forex reserves.
Components of India’s FOREX Reserves: Foreign currency assets (FCAs), Special Drawing Rights (SDRs), Gold Reserves and RBI’s Reserve position with International Monetary Fund (IMF). FCAs constitute largest component of India’s forex Reserves. It is expressed in dollar terms and includes effect of appreciation/depreciation of non-US units like the euro, pound and the yen held in the reserves.
Note: India’s forex reserves had touched life-time high of US $426.028 billion in week to April 13, 2018.