The curious case of India’s rising forex reserves and falling rupee

News: Further expansion of RBI’s balance sheet without normalizing credit offtake (demand for credit) will only raise economic risks. How RBI manages its balance sheet? RBI’s balance sheet consists of the asset side and the liability side. Reserve Money (RM) or base money – Asset side:  It consists of net domestic assets (NDA) and net… Continue reading The curious case of India’s rising forex reserves and falling rupee

Explained: Forex reserves at all-time high — why did this happen, and what does it mean for India’s economy?

News: As per the Reserve Bank of India (RBI) data, India’s foreign exchange (forex) reserves has touched a record high of USD 541.431 billion in the week ended 28th August 2020. Facts: Reasons for High Foreign Reserves: Investment: Rise in investment by foreign portfolio investors and increased foreign direct investments(FDIs). Fall in Crude Oil Prices:… Continue reading Explained: Forex reserves at all-time high — why did this happen, and what does it mean for India’s economy?

India’s forex reserves cross $450 billion for the first time

News:India’s foreign exchange reserves have crossed the $450-billion mark for the first time. Facts: Why has the reserves increased? The foreign exchange reserves have increased due to strong inflows which enabled the Reserve Bank of India(RBI) to buy dollars from the market. About Foreign exchange reserves: Foreign exchange reserves are the foreign currencies held by… Continue reading India’s forex reserves cross $450 billion for the first time

RBI panel to firm up mechanism for assessing adequacy of forex reserves

News:The Reserve Bank of India (RBI) has formed an internal group to assess whether foreign exchange reserves are adequate to cover various risks. Facts: According to Bimal Jalan Committee report, the RBI’s foreign exchange reserves in 2008 were higher than the country’s external debt.But this position has reversed in 2019. At present,India’s foreign exchange reserves… Continue reading RBI panel to firm up mechanism for assessing adequacy of forex reserves

Forex reserves at a new high of $430.57 bn

According to the latest RBI data,India’s foreign exchange reserves has reached a new high at USD 430 billion due to rise in foreign currency assets. Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies.These reserves are used to back liabilities and influence monetary policy. These assets serve many purposes… Continue reading Forex reserves at a new high of $430.57 bn

Increasing forex reserve to help improve import cover

India’s foreign exchange reserves has increased to a one-year high of $418.5 billion.The reserves has increased due to strong inflow of funds by Foreign Portfolio Investors(FPI). Further,RBI’s decision to conduct $10 billion dollar-rupee buy-sell swap auction between March and April 2019 has also contributed to the increase in reserves. The increase in forex reserves has… Continue reading Increasing forex reserve to help improve import cover