Stable rupee, lower oil prices push forex reserves to all-time high

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  1. According to the government data,India’s foreign exchange reserves has reached an all-time high of $430.37 billion till July 19,2019.
  2. This surge in the foreign currency reserves was aided by the Recently conducted currency swaps worth $10 billion by the Reserve Bank of India.
  3. Further,the inflows have also come on the back of a stable rupee and relatively lower crude oil prices.
  4. Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies.These reserves are used to back liabilities and influence monetary policy.
  5. These assets serve many purposes but are most significantly held to ensure that a central government agency has backup funds if their national currency rapidly devalues or becomes altogether insolvent.
  6. The Foreign exchange reserves of India consists of four categories which are (a)Foreign Currency Assets (b)Gold (c)Special Drawing Rights(SDRs) and (d)Reserve Tranche Position.