Forex for a trader
Current forex reserve of india

Current forex reserve of indiaShould India hold $400 billion of forex reserves? If instead of maintaining large forex reserves, the funds are used to finance, say, infrastructure projects, the returns will be much higher. Foreign exchange (forex) reserves with the Reserve Bank of India (RBI) have now crossed the $400-billion mark. This is being celebrated by many people. This column takes a different view. Suppose a country uses fixed exchange rates. If the demand for foreign exchange is high and the exchange rate cannot be increased to induce a reduction in demand, then the central bank needs to have adequate reserves so that it can supply foreign exchange and meet the excess demand. In contrast, under a flexible exchange rate regime, the price of foreign exchange can adjust to bring about a balance between demand and supply. In this context, foreign exchange reserves are not required under a flexible exchange rate regime. It is true that under a flexible exchange rate regime, flexibility can give way to considerable volatility in the foreign exchange market. In this case, it helps to have foreign exchange reserves with the central bank. However, this need arises a lot more if the central bank has multiple objectives than in the case where the central bank has adopted inflation targeting. In the latter case, there is less uncertainty for currency markets.

The price mechanism works better there and the need for stabilization with forex reserves is less. The RBI has been using flexible exchange rates since the early 1990s; prior to that it followed a fixed exchange rate regime (which is, in fact, an important reason why there was a balance of payments crisis in 1990-91). Furthermore, it formally adopted inflation targeting in June 2016 (previously the RBI followed multiple indicator approach, which arguably played a role in the events culminating in near-crisis in the currency market in 2013). Given the two important changes in policy regimes, there is no compelling need for the RBI to maintain very large reserves now. This is incidentally true not just of India but most other emerging economies that are similarly placed. The proposal here to cut down foreign exchange reserves had been put forward earlier by the erstwhile Planning Commission in 2004-05, but it was criticized. The criticism was not always valid. For example, the critique by Arvind Panagariya (now at Columbia University), in his 2008 book, India: The Emerging Giant , was actually about the short-run adjustment process involved in shifting from foreign exchange reserves to investments in infrastructure projects rather than about the issue of optimal level of reserves in the long run. These arguments, missed the woods for the trees. It is worth revisiting the proposal. Often there is a tendency to keep forex reserves equal to the value of six months of imports. However, foreign exchange reserves, as Kaushik Basu (Cornell University) emphasized, are required to finance only the current account deficits, and not imports as a whole. By this yardstick, the foreign exchange reserves with the RBI are huge. If we take current account deficit at 7.5% of GDP (which is extremely high), then there is a need of about $85 billion of foreign exchange reserves.

The actual reserves are $400 billion. At the end of March, foreign exchange reserves were equal to 78.4% of India’s total external debt. This is a very large proportion. This is particularly true when short-term debt is only 23.8% of the total debt. There are some difficulties with the concepts used but the essential story that foreign exchange reserves are large relative to the flows of hot money (including the portion of equity investments, which is hot money) remains unchanged—more so if other policies are also adopted. The ministry of finance (MoF) can, according to Anton Korinek at Johns Hopkins University in a series of papers, impose a tax on capital inflows or outflows, if these are sudden and large. Such a tax can discourage large capital flows; the rupee will then neither appreciate nor depreciate too much. If instead of maintaining large forex reserves, the funds are used to finance, say, useful infrastructure projects, the returns will be much higher. So, the opportunity cost of foreign exchange reserves is very high. In contrast, if the tax policy is used, the revenues will rise for the MoF (and the costs of large forex reserves are not incurred by the RBI). So, the proposed tax policy is superior to the policy of using forex reserves to stabilize the rupee.

There is yet another safeguard available. India can buy an inexpensive credit line from the International Monetary Fund or elsewhere. Such a credit line is an option that gives India the right (but not obligation) to borrow if a crisis situation were to arise in future. This instrument, as this author has shown in several papers, reduces the need for large foreign exchange reserves. India already has a credit line to the tune of $50 billion. Additional credit lines can be bought. So, forex reserves can be much less. It is true that China’s reserves are much larger than those of India but that is a different story. The yuan had remained undervalued for long, which pushed exports. The large reserves are then a cumulative effect of that policy. However, that story is over and not really replicable now. Also, though China’s reserves were $3.84 trillion in 2014, they have now come down to $3.1 trillion. It appears that they will come down further.

Also, $800 billion out of the foreign exchange reserves is China’s sovereign wealth fund. If the RBI must have large foreign assets (though there is really no need), then it can be divided into two parts. One part can be the standard foreign exchange reserves which are liquid and give a low return (1% or less). The other part can be a sovereign wealth fund, which is relatively illiquid and gives a high return. Gurbachan Singh is visiting faculty at the Indian Statistical Institute (Delhi Centre) and Ashoka University. Published with permission from Ideas For India, an economics and policy portal. India forex reserves head for $400 billion as RBI defends rupee. With the rupee set to remain under pressure in the face of an emerging market sell-off, trade war jitters and a stronger dollar, there’s little sign RBI will ease up on its currency intervention. Mumbai: India’s foreign exchange (forex) reserves may soon drop below the $400 billion mark for the first time since November as the Reserve Bank of India steps up action to shore up one of Asia’s worst-performing currencies. Forex reserves have steadily declined by $21 billion from a record peak of $426 billion in mid-April, and official data on Friday may show a further slide.

With the rupee set to remain under pressure in the face of an emerging market sell-off, trade war jitters and a stronger dollar, there’s little sign RBI will ease up on its currency intervention. The magnitude of the slump since the April peak matches the drop in forex reserves in the four months through August 2013 in the aftermath of the so-called taper tantrum, when the rupee plunged more than 15 against the dollar. The rupee has lost more than 7% against the dollar so far this year and was trading at 68.637 per dollar on Thursday, not far from its record low. Forex reserves are still strong enough to cover more than nine months of import needs, and policy makers aren’t panicking for now. To strengthen buffers, economic affairs secretary Subhash Chandra Garg said last month the government isn’t averse to a foreign currency non-resident type deposit collection while keeping alive the option of a sovereign bond issue. But there’s no immediate need for these, he said. If the rupee’s weakness is sustained, policy makers have other options available to curb the current-account deficit and limit foreign-currency demand, including import tariffs, caps on external debt and off-market swap deals with oil importers. Nearly $7 billion from Indian bonds and stocks have exited so far this year and the Reserve Bank of India has sold dollars steadily to smooth the volatility. With the US Federal Reserve set to hike interest rates further and trade tensions weighing on global growth, foreign investors are pulling out of emerging markets to safer havens. RBI governor Urjit Patel has expressed worries about the emerging-market turmoil, arguing that the US Fed’s plans to shrink its balance sheet are adding to risks. India’s banking regulator raised interest rates for the first time in four years in June and another quarter percentage point hike is possible next week as inflation hovers above RBI’s medium term target of 4%. Higher rates boosts the appeal of Indian assets and helps to retain almost $100 billion in short-term debt that the RBI considers hot money, which can quickly leave the country in times of global risk aversion. India won’t be spared if trade friction between the US and China hurts global growth and slows export demand.

The trade shortfall is already at a five-year high, a key reason the current-account deficit is seen widening to 2.4% of gross domestic product in the current fiscal year ending March 2019. “India’s exports could come under pressure if these headwinds persist,” said Kapil Gupta, an analyst at Edelweiss Securities Ltd. That’s not good news for the trade balance as a larger deficit usually puts more downward pressure on the currency. India is the world’s fastest growing oil user and a 50% jump in crude prices from a year ago have pushed up the import bill, adding to pressure on the current account, while also worsening the inflation outlook. With the economy rebounding this year, imports of electronic goods are also up more than 20% from a year ago. Strong domestic consumption and a modest recovery in investment could spark demand for more capital goods imports. Forex reserves drop by USD 33.2 mn to USD 400.84 bn. India’s foreign exchange reserves fell by USD 33.2 million to USD 400.847 billion in the week to August 17 mainly due to fall in foreign currency assets, according to RBI data. In the previous week, the forex reserves had witnessed a drop of USD 1.822 billion to USD 400.881 billion. The reserves have been declining in the past few weeks as the Reserve Bank is selling the US dollar to contain depreciation in the rupee, which is frequently testing the 70-level against the American unit. The rupee opened today at 70.24 a dollar and closed at 69.91. The Indian unit had hit an intra-day low of USD 70.40 on April 14, 2018. In the week ended August 17, foreign currency assets, a major component of the overall reserves, dipped by USD 60.2 million to USD 376.205 billion, as per data. Expressed in the US dollar terms, foreign currency assets include the effect of appreciationdepreciation of the non-US currencies such as the euro, pound and the yen held in the reserves. Gold reserves rose by USD 36.1 million to USD 20.727 billion in the reporting week. The special drawing rights with International Monetary Fund (IMF) dipped by USD 3.4 million to USD 1.463 billion.

The country’s reserve position with the IMF also declined by USD 5.7 million to USD 2.452 billion, the apex bank said. India's forex reserves may fall below $400 billion mark. With the rupee coming under severe pressure due to meltdown in the Turkish lira, India's foreign exchange reserves has come within striking distance of falling below the $400 billion mark. Reserve Bank of India data showed that reserves fell $1.8 billion in the week to August 10 to $400.88 billion. Foreign exchange dealers said that RBI was seen selling dollars to prevent the local currency from falling freely. The country's trade deficit hit a 5-year high of $18.02 billion in July, putting added pressure on the local currency. It has fallen about $26 billion from the record high level of $426.082 billion seen on April 13. RBI sold $14.4 billion in first quarter of the year as against a cumulative purchase of $8.8 billion in the corresponding quarter last year, Care Ratings said in a research note. Foreign investment flows, however, turned positive after being negative in the first three months of the year. The debt and equity markets saw $941 million inflows in August so far, Care Ratings said. India's forex reserves slip by $ 33 million. Mumbai: India's foreign exchange (Forex) reserves slipped by $33.2 million during the week ended August 17, official data showed on Friday. According to the Reserve Bank of India (RBI) weekly statistical supplement, the overall forex reserves inched down to $400.85 billion from $400.88 billion reported for the week ended August 10. India's forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the RBI's position with the International Monetary Fund (IMF). Segment-wise, FCAs -- the largest component of the Forex reserves -- receded by $60.2 million to $376.21 billion during the week under review. Besides the US dollar, FCAs consist of nearly 20-30 per cent of major global currencies. However, the value of the country's gold reserves increased by $36.1 million to $20.73 billion.

As per the data, the SDRs' value slipped by $3.4 million to $1.46 billion, while the country's reserve position with the IMF inched down by $5.7 million to $2.45 billion. India forex reserves head for $400 billion as RBI defends rupee. With the rupee set to remain under pressure in the face of an emerging market sell-off, trade war jitters and a stronger dollar, there’s little sign RBI will ease up on its currency intervention. Mumbai: India’s foreign exchange (forex) reserves may soon drop below the $400 billion mark for the first time since November as the Reserve Bank of India steps up action to shore up one of Asia’s worst-performing currencies. Forex reserves have steadily declined by $21 billion from a record peak of $426 billion in mid-April, and official data on Friday may show a further slide. With the rupee set to remain under pressure in the face of an emerging market sell-off, trade war jitters and a stronger dollar, there’s little sign RBI will ease up on its currency intervention. The magnitude of the slump since the April peak matches the drop in forex reserves in the four months through August 2013 in the aftermath of the so-called taper tantrum, when the rupee plunged more than 15 against the dollar. The rupee has lost more than 7% against the dollar so far this year and was trading at 68.637 per dollar on Thursday, not far from its record low. Forex reserves are still strong enough to cover more than nine months of import needs, and policy makers aren’t panicking for now. To strengthen buffers, economic affairs secretary Subhash Chandra Garg said last month the government isn’t averse to a foreign currency non-resident type deposit collection while keeping alive the option of a sovereign bond issue. But there’s no immediate need for these, he said. If the rupee’s weakness is sustained, policy makers have other options available to curb the current-account deficit and limit foreign-currency demand, including import tariffs, caps on external debt and off-market swap deals with oil importers. Nearly $7 billion from Indian bonds and stocks have exited so far this year and the Reserve Bank of India has sold dollars steadily to smooth the volatility. With the US Federal Reserve set to hike interest rates further and trade tensions weighing on global growth, foreign investors are pulling out of emerging markets to safer havens. RBI governor Urjit Patel has expressed worries about the emerging-market turmoil, arguing that the US Fed’s plans to shrink its balance sheet are adding to risks.

India’s banking regulator raised interest rates for the first time in four years in June and another quarter percentage point hike is possible next week as inflation hovers above RBI’s medium term target of 4%. Higher rates boosts the appeal of Indian assets and helps to retain almost $100 billion in short-term debt that the RBI considers hot money, which can quickly leave the country in times of global risk aversion. India won’t be spared if trade friction between the US and China hurts global growth and slows export demand. The trade shortfall is already at a five-year high, a key reason the current-account deficit is seen widening to 2.4% of gross domestic product in the current fiscal year ending March 2019. “India’s exports could come under pressure if these headwinds persist,” said Kapil Gupta, an analyst at Edelweiss Securities Ltd. That’s not good news for the trade balance as a larger deficit usually puts more downward pressure on the currency. India is the world’s fastest growing oil user and a 50% jump in crude prices from a year ago have pushed up the import bill, adding to pressure on the current account, while also worsening the inflation outlook. With the economy rebounding this year, imports of electronic goods are also up more than 20% from a year ago. Strong domestic consumption and a modest recovery in investment could spark demand for more capital goods imports. The Indian Rupee is the currency of India. Our currency rankings show that the most popular India Rupee exchange rate is the USD to INR rate. The currency code for Rupees is INR, and the currency symbol is ?. Below, you'll find Indian Rupee rates and a currency converter. You can also subscribe to our currency newsletters with daily rates and analysis, read the XE Currency Blog, or take INR rates on the go with our XE Currency Apps and website. More info ? Top INR Exchange Rates.

Name: Indian Rupee. Symbol: ? paisa: p. Minor Unit: 1100 = paisa. Top INR Conversion: USDINR. Top INR Chart: USDINR Chart. Inflation: 3.80% Nicknames: Taaka, Rupayya, Rubai, Athanni (for 50 Paise coins) Coins: Freq Used: ?1, ?2, ?5, ?10, p50. Banknotes: Freq Used: ?5, ?10, ?20, ?50, ?100, ?500, ?2000 Rarely Used: ?1, ?2. Central Bank: Reserve Bank of India Website: rbi. org. in. Users: India, Bhutan, Nepal. Have more info about the Indian Rupee? Email us ? XE Currency Converter. Why are you interested in the INR? Indian Rupee History. The central bank in India is called the Reserve Bank of India. The INR is a managed float, allowing the market to determine the exchange rate.

As such, intervention is used only to maintain low volatility in exchange rates. Early Coinage of India India was one of the first issuers of coins, circa 6th Century BC, with the first documented coins being called 'punch-marked' coins because of the way they were manufactured. India's coinage designs frequently changed over the next few centuries as various empires rose and fell. By the 12th century a new currency referred to as Tanka was introduced. During the Mughal period, a unified monetary system was established and the silver Rupayya or Rupee was introduced. The states of pre-colonial India minted their coins with a similar design to the silver Rupee with variations depending on their region of origin. Currency in British India In 1825, British India adopted a silver standard system based on the Rupee and was used until the late 20th century. Although India was a colony of Britain, it never adopted the Pound Sterling. In 1866, financial establishments collapsed and control of paper money was shifted to the British government, with the presidency banks being dismantled a year later. That same year, the Victoria Portrait series of notes was issued in honor of Queen Victoria, and remained in use for approximately 50 years. The Modern Day Indian Rupee After gaining its independence in 1947 and becoming a republic in 1950, India's modern Rupee (INR) was changed back to the design of the signature coin. The Indian Rupee was adopted as the country's sole currency, and the use of other domestic coinage was removed from circulation. India adopted a decimalization system in 1957. In 2016, the Rs 500 and Rs 1,000 ceased to be legal tender in India. The removal of the denominations is an attempt to stop corruption and illegal cash holdings.

In November of the same year, the Reserve Bank of India began issuing ? 2000 denomination banknotes in the Mahatma Gandhi (New) Series. India's forex reserves may fall below $400 billion mark. With the rupee coming under severe pressure due to meltdown in the Turkish lira, India's foreign exchange reserves has come within striking distance of falling below the $400 billion mark. Reserve Bank of India data showed that reserves fell $1.8 billion in the week to August 10 to $400.88 billion. Foreign exchange dealers said that RBI was seen selling dollars to prevent the local currency from falling freely. The country's trade deficit hit a 5-year high of $18.02 billion in July, putting added pressure on the local currency. It has fallen about $26 billion from the record high level of $426.082 billion seen on April 13. RBI sold $14.4 billion in first quarter of the year as against a cumulative purchase of $8.8 billion in the corresponding quarter last year, Care Ratings said in a research note. Foreign investment flows, however, turned positive after being negative in the first three months of the year. The debt and equity markets saw $941 million inflows in August so far, Care Ratings said. India FX Reserves (USD) India FX Reserves (USD) NEW DELHI, April 2 (Reuters) - India's economic affairs secretary on Monday said that the country's fiscal and revenue deficits would be lower than the revised estimates for the 201718 fiscal. Investing. com - Gold found support in Asia on Friday as tensions between North Korea and Washington show no signs of abating and investors looked ahead to data out of top gold buyer India on FX. MUMBAI, Feb 26 (Reuters) - The Reserve Bank of India's foreign exchange reserves fell $1.46 billion as of Feb. 19 from a week earlier, marking the first weekly fall in five, as the central bank was. FX Reserves, USD Discussion. We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: Enrich the conversation Stay focused and on track. Only post material that’s relevant to the topic being discussed.

Be respectful. Even negative opinions can be framed positively and diplomatically. Use standard writing style. Include punctuation and upper and lower cases. NOTE : Spam andor promotional messages and links within a comment will be removed Avoid profanity, slander or personal attacks directed at an author or another user. Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse. Only English comments will be allowed.

India's forex reserves slip by $ 33 million. Mumbai: India's foreign exchange (Forex) reserves slipped by $33.2 million during the week ended August 17, official data showed on Friday. According to the Reserve Bank of India (RBI) weekly statistical supplement, the overall forex reserves inched down to $400.85 billion from $400.88 billion reported for the week ended August 10. India's forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the RBI's position with the International Monetary Fund (IMF). Segment-wise, FCAs -- the largest component of the Forex reserves -- receded by $60.2 million to $376.21 billion during the week under review. Besides the US dollar, FCAs consist of nearly 20-30 per cent of major global currencies. However, the value of the country's gold reserves increased by $36.1 million to $20.73 billion. As per the data, the SDRs' value slipped by $3.4 million to $1.46 billion, while the country's reserve position with the IMF inched down by $5.7 million to $2.45 billion.



Articles:

  • Current forex reserve of india