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Forex reserves zoom by $10.417 billion to $572 billion

Forex reserves zoom by $10.417 billion to $572 billion

  • India’s forex reserves zoomed by $10.417 billion to $572 billion, making it one of the biggest weekly jumps in recent times.

Recent trends in FOREX Reserves

  • In the previous reporting week, the overall reserves had dropped by $1.268 billion to $561.583 billion.
  • In October 2021, the country’s forex reached an all-time high of $645 billion.
  • The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.
  • In October 2022, the reserves had swelled by $14.721 billion during a week.

What is Foreign Exchange (Forex) Reserve?

  • Foreign exchange reserves are important assets held by the central bank in foreign currencies as reserves.
  • They are commonly used to support the exchange rate and set monetary policy.
  • In India’s case, foreign reserves include Gold, Dollars, and the IMF’s quota for Special Drawing Rights.
  • Most of the reserves are usually held in US dollars, given the currency’s importance in the international financial and trading system.
  • Some central banks keep reserves in Euros, British pounds, Japanese yen, or Chinese yuan, in addition to their US dollar reserves.

PRelims Take AWay

  • SDR
  • IMF
  • Foreign Reserves

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