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Forex reserves
Why is it in the news ?
- India’s foreign exchange reserves crossed the $450-billion mark for the first time ever.
- The rise is due to the strong inflows which enabled the central bank to buy dollars from the market, thus checking any sharp appreciation of the rupee.
More in the news
- Import Cover: At $451.7 billion, the country’s import cover is now over 11 months.
- To check on Volatility in Rupee value:
(1) RBI intervenes in the foreign exchange market to curb volatility and does not target a particular level of exchange rate.
(2) The rise in foreign exchange reserves will give the central bank the firepower to act against any sharp depreciation of the rupee.
- Foreign investment:
(1) Net foreign direct investment rose to $20.9 billion in the first half of 2019-20 from $17 billion a year ago.
(2) Net foreign portfolio investment was $8.8 billion in April-November 2019 as against net outflows of $14.9 billion in the same period last year.
Source
The Hindu.