INDIA'S FOREX RESERVES AT RECORD HIGH OF $424.864 BILLION:RBI

INDIA'S FOREX RESERVES AT RECORD HIGH OF $424.864 BILLION:RBI

According to the Reserve Bank of India (RBI), India’s forex (foreign exchange) reserves have touched record high of $424.864 billion in April 2018. The surge was due to massive spike in foreign currency assets (FCAs), a key component of the reserves. The forex reserve had crossed $400-billion mark for the first time in September 2017, but has since been fluctuating.

Forex Reserves

The forex are reserve assets held by a central bank in foreign currencies. It acts as buffer to be used in challenging times and used to back liabilities on their own issued currency as well as to influence monetary policy. Almost all countries in world, regardless of size of their economy, hold significant foreign exchange reserves.

The components of India’s FOREX Reserves include Foreign currency assets (FCAs), Gold Reserves, Special Drawing Rights (SDRs) and RBI’s Reserve position with International Monetary Fund (IMF). FCAs constitute largest component of Indian Forex Reserves and are expressed in US dollar terms.

FOREX Reserves in April 2018

• Foreign currency assets (FCAs): $399.776 billion.
• Gold reserves: $21.484 billion.
• SDRs with IMF: $1.534 billion.
• Reserve position with the IMF: $2.070 billion.
  
  .
  https://currentaffairs.gktoday.in/category/business-economy-banking/