*In and were at US$ 252.0 billion at

*In 2018 forex reserves are as on 5th
Jan 2018 (as on 31st March from 2001 – 2017)                                              Source: rbi.org.in & data.gov.in

 

 

                                                                                                                                                                                                Source: data.imf.org

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BRICS Nations

Country Name

 Forex Reserve Assets As on 31st Mar
2017   (US $ Millions)

China

          3,102,764

Russia

              397,907

Brazil

              370,111

India

              369,955

South Africa

                46,588

                                                     
Source: data.imf.org

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign
exchange reserves are an important component of the balance of payments and an
essential element in the analysis of an economy’s external position. The level
of India’s foreign exchange reserves comprising foreign currency assets (FCA),
gold, SDRs and reserve tranche position (RTP) in the IMF

 

 

peaked at
US$ 314.6 billion at end-May 2008. The reserves declined thereafter to US$
247.7 billion at the end of November 2008 and were at US$ 252.0 billion at the
end of March 2009. Fallout of the global crisis and strengthening of the US
dollar vis-à-vis other international currencies has been responsible for the
decline.

A major
fallout of the global financial crisis has been the reversal of portfolio flows
(net outflow of US$ 11.3 billion during April-December 2008). Together with the
widening trade deficit, such outflows have upset the supply-demand balance in
the domestic foreign exchange market, leading to decline in the rupee exchange
rate vis-à-vis US dollar. The value of rupee declined from Rs 40.0 in April
2008 to Rs 48.66 in October 2008. The currency came under sharp pressure after
the collapse of the Lehman Brothers in September 2008. The Reserve Bank,
therefore, intervened to augment supply in the domestic foreign exchange market
aimed at reducing undue volatility. The rupee thereafter attained a measure of
stability. The exchange rate was Rs. 51.2 per US dollar in March 2009

 

An
appreciation in the value of US dollar against major international currencies
translates into lower US dollar equivalent for assets held in other currencies.
Thus, during fiscal 2008- 09, out of the decline of US$ 57.8 billion in FCA
(from US$ 299.2 billion on 31.3.2008 to US$ 241.4 billion on 31.3.2009), the fall
of US$ 39.7 billion (69 per cent) was due to valuation change and only US$ 17.9
billion (31 per cent) was on account of net sale of dollars by the RBI. The US
dollar has appreciated by 38.8 per cent against pound sterling, 19.3 per cent
against Euro and 32.6 per cent against Australian dollar between March 2008 and
March 2009.

 

http://indiabudget.nic.in

 

 

In 1991, when India faced its worst ever balance of payment
crisis, the country had to pledge 67 tonnes of gold to Union Bank of
Switzerland and Bank of England to raise $605 million (Rs2,843.5 crore today)
to shore up its dwindling foreign exchange reserves, which were then barely
enough to buy two weeks of imports. India’s foreign exchange reserves were at
$1.2 billion in January 1991 and by June, they were depleted by half. barely enough to last for roughly 3 weeks of
essential imports  

Gold as a proportion of our reserves is relatively small

Gold is the ultimate currency. In fact, only gold came to our
rescue during (the) 1991 crisis, so it makes sense that RBI should try to
increase its gold holdings,
18 years after the incident, in 2009, India bought 200 Metric tons of gold from International Monetary Fund,which was nearly three times the amount which India pawned
to IMF in 1991

http://www.livemint.com

 

 

 Reserve bank of india Act and the Foreign
Exchange Management Act, 1999 set the legal provisions for governing the
foreign exchange reserves. RBI accumulates foreign currency reserves by
purchasing from authorized dealers in open market operations. Foreign exchange
reserves of India act as a cushion against rupee volatility once global
interest rates start rising.

 

 

First, countries use their foreign exchange reserves to keep
the value of their currencies at a fixed rate.

 

A third, and critical, function is to maintain liquidity in case of an economic crisis.
For example, a flood or volcano might temporarily suspend local exporters’
ability to produce goods. That cuts off their supply of foreign currency to pay
for imports. In that case, the central bank can exchange its foreign currency
for their local currency, allowing them to pay for and receive the imports.

Similarly, foreign investors will get spooked if a
country has a war, military coup, or other blow to confidence. They withdraw
their deposits from the country’s banks, creating a severe shortage in foreign
currency. This pushes down the value of the local currency since fewer people
want it. That makes imports more expensive, creating inflation. 

The central bank supplies foreign
currency to keep markets steady. It also buys the local currency to support its
value and prevent inflation.

 

reserves are always needed to make sure a country will meet
its external obligations. These include international payment obligations,
including sovereign and commercial debts. They also include financing of
imports and the ability to absorb any unexpected capital movement

 

 *In 2018 forex reserves are as on 5th
Jan 2018 (as on 31st March from 2001 – 2017)                                              Source: rbi.org.in & data.gov.in

 

 

                                                                                                                                                                                                Source: data.imf.org

 

 

 

 

BRICS Nations

Country Name

 Forex Reserve Assets As on 31st Mar
2017   (US $ Millions)

China

          3,102,764

Russia

              397,907

Brazil

              370,111

India

              369,955

South Africa

                46,588

                                                     
Source: data.imf.org

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign
exchange reserves are an important component of the balance of payments and an
essential element in the analysis of an economy’s external position. The level
of India’s foreign exchange reserves comprising foreign currency assets (FCA),
gold, SDRs and reserve tranche position (RTP) in the IMF

 

 

peaked at
US$ 314.6 billion at end-May 2008. The reserves declined thereafter to US$
247.7 billion at the end of November 2008 and were at US$ 252.0 billion at the
end of March 2009. Fallout of the global crisis and strengthening of the US
dollar vis-à-vis other international currencies has been responsible for the
decline.

A major
fallout of the global financial crisis has been the reversal of portfolio flows
(net outflow of US$ 11.3 billion during April-December 2008). Together with the
widening trade deficit, such outflows have upset the supply-demand balance in
the domestic foreign exchange market, leading to decline in the rupee exchange
rate vis-à-vis US dollar. The value of rupee declined from Rs 40.0 in April
2008 to Rs 48.66 in October 2008. The currency came under sharp pressure after
the collapse of the Lehman Brothers in September 2008. The Reserve Bank,
therefore, intervened to augment supply in the domestic foreign exchange market
aimed at reducing undue volatility. The rupee thereafter attained a measure of
stability. The exchange rate was Rs. 51.2 per US dollar in March 2009

 

An
appreciation in the value of US dollar against major international currencies
translates into lower US dollar equivalent for assets held in other currencies.
Thus, during fiscal 2008- 09, out of the decline of US$ 57.8 billion in FCA
(from US$ 299.2 billion on 31.3.2008 to US$ 241.4 billion on 31.3.2009), the fall
of US$ 39.7 billion (69 per cent) was due to valuation change and only US$ 17.9
billion (31 per cent) was on account of net sale of dollars by the RBI. The US
dollar has appreciated by 38.8 per cent against pound sterling, 19.3 per cent
against Euro and 32.6 per cent against Australian dollar between March 2008 and
March 2009.

 

http://indiabudget.nic.in

 

 

In 1991, when India faced its worst ever balance of payment
crisis, the country had to pledge 67 tonnes of gold to Union Bank of
Switzerland and Bank of England to raise $605 million (Rs2,843.5 crore today)
to shore up its dwindling foreign exchange reserves, which were then barely
enough to buy two weeks of imports. India’s foreign exchange reserves were at
$1.2 billion in January 1991 and by June, they were depleted by half. barely enough to last for roughly 3 weeks of
essential imports  

Gold as a proportion of our reserves is relatively small

Gold is the ultimate currency. In fact, only gold came to our
rescue during (the) 1991 crisis, so it makes sense that RBI should try to
increase its gold holdings,
18 years after the incident, in 2009, India bought 200 Metric tons of gold from International Monetary Fund,which was nearly three times the amount which India pawned
to IMF in 1991

http://www.livemint.com

 

 

 Reserve bank of india Act and the Foreign
Exchange Management Act, 1999 set the legal provisions for governing the
foreign exchange reserves. RBI accumulates foreign currency reserves by
purchasing from authorized dealers in open market operations. Foreign exchange
reserves of India act as a cushion against rupee volatility once global
interest rates start rising.

 

 

First, countries use their foreign exchange reserves to keep
the value of their currencies at a fixed rate.

 

A third, and critical, function is to maintain liquidity in case of an economic crisis.
For example, a flood or volcano might temporarily suspend local exporters’
ability to produce goods. That cuts off their supply of foreign currency to pay
for imports. In that case, the central bank can exchange its foreign currency
for their local currency, allowing them to pay for and receive the imports.

Similarly, foreign investors will get spooked if a
country has a war, military coup, or other blow to confidence. They withdraw
their deposits from the country’s banks, creating a severe shortage in foreign
currency. This pushes down the value of the local currency since fewer people
want it. That makes imports more expensive, creating inflation. 

The central bank supplies foreign
currency to keep markets steady. It also buys the local currency to support its
value and prevent inflation.

 

reserves are always needed to make sure a country will meet
its external obligations. These include international payment obligations,
including sovereign and commercial debts. They also include financing of
imports and the ability to absorb any unexpected capital movement

 

 

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