Foreign Exchange Reserves At Record High Increased By More Than 5 Arab Dollar.
Foreign exchange reserves are funds or other assets held by a country's central banks, which are used to pay off liabilities when needed.
The country's foreign exchange reserves rose $5.066 billion to a record high of $608.999 billion in the week ended June 25, 2021. According to RBI data, foreign exchange reserves had declined by $4.418 billion to $603.933 billion in the previous week ended June 18.
According to the reserve bank's weekly data, the increase in foreign exchange reserves for the week ended June 25 is due to an increase in foreign exchange properties (FCA), a major component of the overall reserves. The FCA grew by $4.7 billion to $566.24 billion. Dollar-wise foreign exchange properties also include the impact of increase or decrease in the value of other foreign currencies such as the euro, pound, and yen held in foreign exchange reserves.
Gold reserves rise by $36.5 million.
According to statistics, gold reserves rose by $36.5 million to $36.296 billion. On the other hand, the Special Drawing Rights (SDR) with the Imf remained unchanged at $1.498 billion. The Reserve Bank said India's reserves with the IMF increased marginally during the critical week. It rose $1 million to $4.965 billion.
What are Forex Reserves?
Foreign exchange reserves are funds or other assets held by central banks of the country which are used to pay liabilities if required. Adequate foreign exchange reserves are very important for a healthy economy. It provides much-needed help to the economy in the event of an economic crisis to support imports. This includes foreign exchange assets, gold reserves, and other reserves in the IMF, of which foreign exchange assets hold the largest share after gold.