Despite all the economic pain, India’s forex reserves keep touching new highs. On December 3, India’s foreign exchange reserves touched a new high of $ 451.7 billion. RBI data showed that the forex reserves have been on a continuous upward trend for the past many weeks. Since the beginning of the current fiscal, the forex kitty has grown by $38.8 billion, the largest in recent years, the RBI Governor said.
India’s forex reserves comprise gold reserves, foreign currency assets (FCAs), special drawing rights (SDRs) and India’s reserve position with the International Monetary Fund (IMF).
An adequate amount of forex reserves act as a shock absorber against factors that can negatively affect a currency’s exchange rate.
