India’s foreign exchange reserves are set to hit the $400-billion mark. It already touched a new high of $393.61 billion as on August 11, 2017, and the pace of forex reserves accretion has been the strongest since 2005.
The gain in the country’s forex reserves has been one of the strongest in Asia in the past 12 months.
India remains among the top-ten countries in forex reserve position and has a comfortable import cover of 12 months, as against the norm of three months.
India’s forex reserves touched an all-time low of $5.8 billion at end of March 1991, which could barely finance three weeks’ worth of imports.
It led the Centre to airlift national gold reserves as a pledge to the IMF in exchange for a loan to cover balance of payment debts.
The rise in forex reserves has been because of robust foreign direct and institutional investment flows, which made the rupee appreciate over 6% since January this year.
As a result of high forex reserves, the Economic Survey volume 2 has highlighted that most reserve-based external sector vulnerability indicators have improved.
