Then a big blow, the country’s foreign exchange reserves came down significantly
India’s foreign exchange reserves have also suffered a huge setback last week. It has been going down fast for several weeks in a row. According to the data, this is the fifth consecutive week when there has been a decrease in foreign exchange reserves. The Reserve Bank of India (RBI) has given this information in its latest released data.
Top 5 countries in the world in terms of forex
- China $3.37 trillion
- Japan $1.38 trillion
- Switzerland $1.10 trillion
- Russia $609,400 billion
- India $604,004 billion
This could be the reason
Experts are assuming that due to the steep rise in crude oil prices, the RBI had to sell about $ 5 billion to stop the fall in the rupee against the dollar. Due to this, foreign exchange reserves may decrease. According to RBI data, for the week ended April 8, 2022, the foreign exchange reserves have come down by $ 2.471 billion to the level of $ 604.004 billion. At the same time, state oil companies are also having to pay more dollars to buy crude oil, this is also believed to be the reason for the rapid decrease in foreign exchange reserves. At the same time, in the last 5 weeks, foreign exchange reserves have decreased by $ 28.5 billion.
Strong foreign exchange reserves in the interest of the country
The economic condition of the country which has strong foreign exchange reserves is also considered good. This happens because if there is any problem in the world, then the country can easily order the goods of its need for many months. That is why many countries of the world keep their foreign exchange reserves very strong. In addition to exports in foreign exchange reserves, foreign investments bring in dollars or other foreign exchange. Apart from this, the foreign exchange remitted by the people of India who work abroad is also a big source.
Know how fast the foreign exchange reserves are decreasing
Earlier, in the week ending April 1, 2022, this record was reduced by $ 11.173 billion to $ 606.475 billion. For the week ended March 25, 2022, it had declined by $2.03 billion to $617.648 billion. According to the Reserve Bank, it had declined by $ 2.597 billion to $ 619.678 billion in the week ended March 18, 2022. Earlier, in the week ended March 11, it had declined by $ 9.646 billion to $ 622.275 billion.
RBI data
According to the weekly data released by the RBI, this decline in forex reserves in the week ended April 8 was mainly due to the reduction in the foreign currency asset (FCA), which is a significant part of the total currency reserves. The Reserve Bank said that India’s FCA declined by $ 10.7 billion to $ 539.727 billion in the reporting week. Denominated in dollars, FCAs also include the effect of increase or decrease in the value of other foreign currencies such as the euro, pound and yen held in foreign exchange reserves.
