#1. Information About Forex Reserves
Every country keeps foreign exchange reserves to protect itself from economic crisis, which is used to maintain the value of the country's currency. The foreign exchange reserves are kept safe by the central bank. Every country pays special attention to this. In India, it is maintained by the Reserve Bank of India. Most of the countries take loan from the World Bank, foreign exchange reserves are used to exchange it. Information about foreign exchange reserves is being given on this page.
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#2. What is Foreign Exchange Reserves?
Foreign exchange reserves are currency or money or other assets held by the central bank of any country, which are used to pay liabilities in international accounts. The central government of the country deposits money with the Reserve Bank of India on behalf of its financial institutions. It can be in any form, ie Euros, dollars or other assets, most of the currency can be stored in dollar form. The foreign exchange reserves are known as forex reserves or FX reserves.
#3. Funds included in Foreign Exchange Reserves
Foreign exchange reserves include foreign banknotes, foreign bank deposits, foreign treasury bills and short-term and long-term foreign government securities held by the Reserve Bank. Money deposited with the International Monetary Fund (IMF) is also a part of foreign exchange reserves. Foreign exchange reserves are generally considered as part of international investment. Domestic debt along with foreign exchange reserves are also mentioned in the balance sheet of Reserve Bank of India.
#4. How does capital come into foreign exchange reserves?
The main source of foreign exchange reserves is foreign investment, when foreign companies invest in India, they have the currency of their country. He changes the currency in the bank of India, after which he starts his business in India, in this way the foreign currency reaches the Reserve Bank of India through the bank. Reserve Bank of India maintains stocks of Dollar, Euro, Yen with it. The major part of the foreign exchange reserves is in the US dollar. With the decrease or increase in the exchange rate of currencies, the value of foreign exchange reserves also increases.
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#5. India's Foreign Exchange Reserves
The Reserve Bank of India released a report on 22 February 2019, according to which India's total capital reserves have increased from $399.28 billion to $401.78. Capital reserves include foreign exchange reserves, gold reserves (FCA), special drawing rights (SDRs) and the International Monetary Fund (IMF). India's foreign exchange reserves increased from $2.06 billion to $374.06 billion.
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