Foreign exchange reserves surge by USD 9.427 billion
As per RBI Data, India’s foreign exchange reserves surged by USD 9.427 billion. Foreign exchange reserves now stand at a record high of USD 620.576 billion in the week ended July 30.
- In 3rd week of July, reserves had declined by USD 1.581 billion amounting to USD 611.149 billion.
- Rise in reserves was witnessed in line with the increase in foreign currency assets (FCAs). FCAs are major component of overall reserves.
- FCA was raised by USD 8.596 billion, amounting to USD 576.224 billion in the same period.
- Gold reserves rose by USD 760 million amounting to USD 37.644 billion.
- Increase by USD 6 million in special drawing rights (SDRs) was also witnessed with International Monetary Fund (IMF). SDR now stands at USD 1.552 billion.
- India’s reserve position with IMF also increased by USD 65 million to USD 5.156 billion.
Foreign Currency Assets (FCA)
FCA is the most important component of RBI’s foreign exchange reserve. They are assets like US Treasury Bills bought by RBI using foreign currencies. FCA makes the largest component of forex reserve. India’s foreign exchange reserves comprises of:
- Foreign currency assets (FCA)
- Special Drawing Rights (SDRs)
- Reserve tranche position (RTP) in the IMF.
FCA is expressed in dollar terms. It includes effect of appreciation or depreciation of non-US units such as euro, pound and yen that are held in foreign exchange reserves.
Foreign Exchange Reserves or Forex reserves
Forex reserves are cash and other reserve assets like gold. They are held by central bank or other monetary authority. Reserves are primarily available to balance payments of the country. It influences the foreign exchange rate of its currency.
Category: Economy & Banking Current Affairs - 2022
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