Reaching and Rising to new heights: Indian forex reserves at four months peak

Reaching and Rising to new heights: Indian forex reserves at four months peak
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New Delhi: The annual bi-monthly committee held by RBI has unveiled a strong forex reserves quantum standing at 604 billion dollars right now. The ratio has been said to have increased to four month high of all time showing the signs of growing trading values and strong currency value.

The RBI has diverted towards this speculation to make currency trade more accessible and relatable. It has been spending dollars in the international market to compensate for the value of rupee that could make it less volatile on the global platform.

Currently, foreign exchange reserves have surpassed the previous value of USD 600 billion after a gap of four months. Rose by 6.1 billion dollars, it is considered to be the highest gain since the week ended July 14. It is certainly believed that RBI's intervention is responsible for changes in foreign currency assets. Resilient and fragile, the rupee has been showing a narrow range of 83.2475 to 83.3950 against the dollar.

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International monetary funds consist of good reserve funds of India which makes it a good enough strong position holder in the international market. 

Broadly analysing the term, foreign exchange reserves are foreign currency deposits held by national and monetary authorities where in popular figures it consists of gold reserves, special drawing rights and IMF reserve position which is officially recognised as international reserves. 

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These foreign currency deposits are the financial assets of the central banks and monetary authorities that are held in different reserve currencies and can be used to back its liabilities. 

Generally, the RBI is supposed to intervene periodically in the market by managing liquidity, which may involve selling dollars, basically to avoid a significant depreciation of the rupee.

According to sovereign authorities, India's existing forex reserves and remittances are substantial enough to bolster economic growth and development. The fortification is needed for the trade deficit and export trading volume. The financial assets are considered to be in stable enough and there are good chances of strong revenue generation.

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