‘Forex reserves’ is an important term in economics and its understanding is necessary to understand how an economy functions with respect to international trade and commerce. Forex reserves or foreign exchange reserves are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies usually the US Dollar and to a lesser degree the Euro, Japanese Yen, and Pound Sterling
According to a report by Goldman Sachs, stronger foreign currency reserves will allow developing market central banks to “buffer their currencies against sharp declines by supplying dollars to the market” at times of volatility.
According to the data available with the Reserve Bank of India, India’s foreign exchange reserves soared by $1.657 billion to $586.412 billion. The nation’s foreign exchange reserves increased for a second week in a row. It reached a level not seen in more than nine months. The total reserves increased by $6.306 billion to $584.755 billion last week.
Also RBI on friday evenuing released weekly statistcal supplement. according to it, the gold reserves of the country declined by $521 million to $46.125 billion. The Special Drawing Rights (SDRs) were down by $38 million to $18.412 billion.
On Friday, the rupee nudged up against the dollar on the foreign exchange market. The partially convertible Rupee was trading at around 82.0950 as opposed to its previous trading session’s finish of 82.1750.
In its monthly bulletin, the RBI noted that financial conditions continue to be volatile and financial markets are on edge. It also notes that there is more uncertainty surrounding the state of the world economy right now. According to the report, contact-intensive services are rebounding, supporting the nation’s overall demand conditions, which are currently solid.