Latest Banking jobs   »   India's forex reserves fall by $2.23...

India’s forex reserves fall by $2.23 bn

India’s forex reserves fall by $2.23 billion: According to data from the Reserve Bank of India (RBI), India’s foreign exchange (forex) reserves decreased by $2.238 billion to 550.871 billion for the week ended September 9.

India’s forex reserves fall by $2.23 billion: Key Points

  • According to the RBI’s Weekly Statistical Supplement, the decline in reserves during the reporting week was caused by a decline in foreign currency assets (FCAs) which is a significant portion of the total reserves.
  • During the reporting week, the FCAs dropped by USD 2.519 billion, reaching USD 489.598 billion.
  • However, the report revealed that the gold reserves increased in value by USD 340 million to USD 38.644 billion and the nation’s reserve position with the IMF improved by USD 8 million to USD 4.91 billion during the reporting week.
  • The Special Drawing Rights (SDRs) decreased by 63 million dollars to 17.719 billion dollars.
  • Numerous banks predict that as the account deficit grows in FY23, the forex reserves will continue to decline.

What do you mean by Foreign Exchange Reserve?

  • Foreign exchange reserves are assets held in reserve by a central bank in foreign currencies, such as bonds, treasury bills, and other government securities.
  • India’s foreign exchange reserves consist of foreign exchange assets, gold reserves, special drawing rights, and a reserve position with the International Monetary Fund(IMF).
  • The value of non-US currencies like the euro, pound, and yen held in foreign exchange reserves is reflected in the foreign currency assets, which are expressed in dollar terms.

Why do we keep Foreign Exchange Reserve?

  • It reduces external vulnerability by keeping enough foreign cash on hand to absorb shocks in emergencies or when borrowing is restricted.
  • It encourages and upholds confidence in the monetary and exchange rate management policies.
  • It enables the ability to act in order to support the national or union currency.

What are the benefits of growing Forex Reserves?

  • It acts as a safety net in the case of an economic Balance of Payments (BoP) crisis.
  • The government and the central bank becomes more confident in managing India’s financial difficulties on the domestic and international fronts because of the growing foreign exchange reserves.
  • Markets and investors will have more faith in a country’s ability to meet its foreign obligations if it has reserves.
  • With expanding forex reserves, the rupee gets stronger against the dollar resulting in Rupee Appreciation.
BOI Becomes First PSB to Go Live On New Direct Tax Collection System TIN 2.0
ESAF SFB Launches ‘Rainbow Account’ For Transgender Community
Will banks remain closed for Onam on 7th & 8th September 2022? FM outlines steps to avert illegal loan apps
HDFC Bank issues India’s first Electronic Bank Guarantee PM Narendra Modi inaugurates World Dairy Summit in Greater Noida
Canara HSBC Life Insurance Launches iSelect guaranteed future plan HDFC Bank launched ‘Bank on Wheels’ in Gujarat
HDFC Life Introduces ‘Click2Protect Super’ Term Insurance Policy Canara HSBC Life Insurance Launches iSelect guaranteed future plan
Axis Bank and Square Yards launched co-branded home buyer ecosystem
India becomes power surplus nation

Current Affairs

Current Affairs July 2022

Current Affairs June 2022

Weekly Current Affairs 2022 PDF

Current Affairs May 2022

Daily Current Affairs 2022

Current Affairs April 2022

Monthly Current Affairs PDF 2022

India's forex reserves fall by $2.23 bn_50.1

Download your free content now!


India's forex reserves fall by $2.23 bn_70.1

Download Hindu Review of October 2021: Free PDF

Download your free content now!

We have already received your details!

India's forex reserves fall by $2.23 bn_80.1

Please click download to receive Adda247's premium content on your email ID

Incorrect details? Fill the form again here

Download Hindu Review of October 2021: Free PDF

Thank You, Your details have been submitted we will get back to you.

Leave a comment

Your email address will not be published. Required fields are marked *