India’s Forex is the Fourth Largest in the World
Date: Wednesday , March 02, 2011
India has the fourth largest foreign exchange reserves and this has helped the nation to tide over global financial crisis, according to The Economic Survey. India’s foreign exchange reserves touched $ 297.3 billion in December, 2010 from $279.1 billion in March. “It needs to be acknowledged that foreign exchange reserves have helped insulate India from the worst impact of the crisis,” it said. In comparison to many western counterparts, India was less affected by the 2008-09 global financial crisis.
The foreign exchange reserves of Japan and Russia stands at $1.12 trillion and $479.4 billion, respectively, while the same of Indian neighbor China is at $2.45 trillion in June, 2010. According to the survey, the country’s reserves mainly comprise portfolio investment (FII), which are more vulnerable to sudden stops and reversals and borrowings from abroad.
India’s foreign exchange reserves have increased over the years from just $5.8 billion in March, 1991. “The reserves reached a peak at $314.6 billion at May-end, 2008 before declining to $252 billion at the end of March 2009.The decline in reserves in 2008-09 was inter alia fallout of the global crisis and strengthening of US dollar vis-a-vis other international currencies,” the Survey said