India Becomes 4th Country to Reach $700 Billion in Forex Reserves

  • India has reached a new milestone by becoming the 4th country globally to surpass $700 billion in foreign exchange reserves, joining China, Japan, and Switzerland.
  • The reserves increased due to strong capital inflows, rising foreign direct investments (FDI), and robust remittances. In FY 2023, India saw a record FDI inflow of over $84 billion.
  • As per RBI data, India's foreign currency assets (FCA) contribute the largest portion of the reserves, valued at over $650 billion, followed by gold reserves worth $44 billion.
  • India’s forex reserves consist of foreign currency assets, gold reserves, SDRs, and the country’s reserve position with the IMF. The recent jump in reserves is partly due to a surge in remittances, which crossed $100 billion in 2022.
  • This achievement strengthens India’s ability to withstand external shocks, manage the current account deficit, and stabilize the rupee, enhancing its global financial stature. The country’s strong export performance and a diversified economy are major contributors. 

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