RBI Dissatisfied With India’s Forex Reserves, And Here’s Why
- ByStartupStory | June 18, 2021
RBI dissatisfied with India’s forex even though, India’s foreign exchange reserve has surpassed $600 billion to reach an all time high of $600.8 because they claim that the current amount of reserve will only support for about 15 months, which is not really great. India has the fifth largest forex reserves, and the amount India has is the lowest among all major countries in the FY 2020-2021, as said by RBI’s Deputy Governor Michael Debabrata Patra.
However, India’s short reserve is not unnatural, China which has the highest forex service, at an amount of $3.2 trillion has coverage only for 16 months. RBI dissatisfied with India’s forex particularly because India owes a large amount to foreigners and it is higher than their asset, which is ultimately putting India at a huge disadvantage with minus 12.9% GDP in terms of net international investment. India’s forex reserve could have been pulled out by an appreciating rupee. Value of Indian rupee has appreciated by 2% since April. Rupee was in fact the most well performed currency in Asia.
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