India’s Current Foreign Exchange Reserves: $311.427 billion
India’s forex reserves continued their downward journey for the fifth consecutive week, India’s foreign exchange reserves plunged by $2.754 billion to $311.427 billion in the week to October 3. The largest fall is seen in US currency assets which make a big component of the overall reserves. During the last quarter under review, this drop in forex was basically due to drop in valuation of Indian rupee on the back of a stronger US currency against other global currencies and talks of withdrawal of quantitative easing by the US. The Federal Reserve has now deferred its tightening programme to next year, helping rupee to regain some of its lost ground this week.
The foreign currency assets, incorporate the effect of both appreciation and depreciation of many non-US currencies also, which are held in reserves.
Even the gold reserves showed a negative trend after being stable for weeks. The reserves fell by $919.7 million. Other components include special drawing rights and India’s reserve position in the IMF which decreased by $22.8 million and $8.2 million to $4.284 billion and 1.540 billion, respectively.
Components of Foreign Reserves
The components of Foreign Reserves in decreasing order are Foreign Currency Assets, Gold, SDRs (Special Drawing Rights) and Reserve Position in IMF Trench.
Categories: Banking Current Affairs 2018