India’s forex reserve has seen tremendous growth since 1990s. As per a data from Ministry of Information and Broadcasting, the India’s forex reserve which stood at 9.22 USD Billion in 1991-92, jumped to 607 USD billion in 2021-22. Besides, India’s Foreign Exchange Reserve also multiplied 335 time since Independence.
As of November 2021, India has the fourth largest forex reserves among the world economies.
As per the Economic Survey 2021-22, India’s total foreign currency assets, including gold, from 2161 USD million in 1950-51, it jumped to Rs 633614 USD million by the end of December 2022.
What are Forex Reserves?
Forex reserves are the foreign currency held by the central banks of a specific country. It provides a cushion against unforeseen external shocks. It is generally held in reserve currencies, usually dollar.
The major objective of holding forex reserves is to maintain confidence in the policies for monetary and exchange rate management and to maintain currency liquidity to absorb external shocks.
As per IMF (International Monetary Fund), the country with highest forex reserves is China. It is followed by Japan and Switzerland. With the forex reserve of India is USD 622.275 Billion as of March 2022, India has surpassed Russia to claim the fourth spot in the country with the highest foreign exchange reserves. The Reserve Bank of India (RBI) is the custodian of forex reserves in India.