India has collected world’s fifth largest foreign exchange reserves amounting to a value which is more than dollar 500 billion full stop it makes a positive spot in an economy which is in a drooping condition at the moment. Data from Central Bank showcased that Indian reserves stand at $8 506.8 billion as of June 26.
the reserves were increased due to a rare account surplus in the first quarter. The account surplus was on account of return off inflows into the the domestic stock markets and foreign direct investment. Investments included by India’s largest company by revenue, Reliance industries limited, is also a major reason. All the above mentioned factors have allowed the Reserve Bank of India to mop up nearly dollar 25 billion in foreign exchange to add to its reserves in the june quarter.
Keeping a large amount of Reserve would help India fight against market volatility. It would also give for investors as well as credit rating agencies a satisfaction that the government is in a condition to meet its debt obligations even when the country projects a bad fiscal Outlook with the first ever possible contraction in more than 40 years.
The current level of Reserve is tantamount to to the Reserve that is required to cover 13 months of imports. Foreign Exchange The vastness of the Reserve could also be expressed by saying that it is one fifth of the country’s GDP. All this makes it the fifth largest globally with China, Japan, Switzerland and Russia ahead of it. This data is provided by the international monetary fund.