(The Gist of PIB) India’s Forex reserves cross record $600 billion-mark

(THE GIST OF PIB) India’s Forex reserves cross record $600 billion-mark

[July-2021]

India’s Forex reserves cross record $600 billion-mark

India’s foreign exchange reserves crossed the $600 billion mark for the first time after rising by $6.842 billion in the week ended on June 4. Forex reserves rose to a record $605.008 billion in the reporting week, helped by a rise in Foreign Currency Assets (FCA), a major component of the overall reserves.

Countries with the highest foreign reserves according to IMF

1. China – $3,330 Billion
2. Japan – $1,378 Billion
3. Switzerland – $1,070 Billion
4. Russia – $605.200 Billion
5. India – $605.008 Billion

What is it?

Foreign-exchange reserves (also called forex reserves or FX reserves) are reserve assets held by a central bank in foreign currencies.
They are used to back liabilities on their own issued currency, support the exchange rate and set monetary policy.

Components:

India’s foreign exchange reserves comprise

1. Foreign currency assets (FCAs). These are maintained in currencies like US dollar, euro, pound sterling, Australian dollar and Japanese yen.
2. Gold
3. SDR (special drawing rights) in IMF: This is the reserve CURRENCY with IMF
4. RTP (reserve tranche position) in IMF: This is the reserve CAPITAL with IMF