FXNEWS24 |India's forex reserves come down by $90 billion in the last one year

The reserves are still significantly stronger than they were during the preceding time period, which included part of the Eurozone crisis and the Fe

The reserves are still significantly stronger than they were during the preceding time period, which included part of the Eurozone crisis and the Federal Reserve’s taper tantrum, thanks to a sustained accumulation through to their high last year.

During the last crisis, the rupee saw one of the worst performances among emerging-market currencies, falling over 30% versus the dollar between September 2011 and September 2013. In comparison to the US dollar, it has decreased by roughly 6.8% in 2022, a far lesser decline than most of its competitors.

However, the central bank must keep in mind that, as of September 2021, when they peaked at $641 billion, foreign exchange reserves have fallen by $90 billion, or 13.9%, according to RBI statistics. The decrease over the previous two years was 14.3%.

The import insurance that these reserves offer has been decreased by the reduction to nine months, which is still far more than the three months that is the industry norm but substantially less than the 19 months at the start of 2021.

Shaktikanta Das, the governor of the central bank, says that thus far, the number of reserves and the banking sector are both sound and capable of absorbing any incoming shocks.

The RBI has stated that it anticipates the nation’s current account deficit to continue under 3% of GDP, which it considers to be manageable given the easing of global gasoline, food, and fertilizer prices as well as the improvement in portfolio flows and exports.

For feedback and suggestions, write to us at [email protected]

India’s forex reserves come down by $90 billion in the last one year

RECOMMENDED FOR YOU