1.India’s Rising Forex Reserves (Foreign Exchange)

What & Where
Foreign exchange reserves = RBI-held external assets: Foreign Currency Assets, gold, SDRs, IMF position
Purpose: buffer against external shocks, maintain rupee stability, honour trade/debt payments
Geography: Managed by Reserve Bank of India, reported weekly per IMF data standards
Quick Facts for MCQs
Composition
- Components: FCA, gold, SDRs, IMF reserve position
- Gold share rising; now >15 % of total stock
Objectives
- Monetary stability: curb INR volatility through market intervention
- Crisis buffer: fund BoP gaps, sudden capital outflows
Significance
- Boosts investor confidence, credit ratings, sovereign borrowing terms
Key Data Points
| Feature | Data-Point |
|---|---|
| Latest reserve level (May 2024) | USD 702+ billion |
| Weekly increase | USD 4.5 billion |
| Gold reserve value | USD 108.5 billion |
| Change in FCA | −USD 1.7 billion |
| Gold driver | RBI purchases + global price rise |
| Largest reserve component | Foreign Currency Assets |
| Valuation frequency | Weekly, New York closing rates |
| SDR issuer | International Monetary Fund |
| Custodian authority | Reserve Bank of India |
| IMF reserve position | Part of total reserves |
Related UPSC Prelims PYQs
Which one of the following groups of items is included in India’s foreign-exchange reserves?
Adequacy of foreign exchange reserves of a country is captured by which of the following indicators? 1. Reserves to import ratio 2. Reserves to external debt ratio 3. Reserves to GDP ratio 4. Reserves to monetary aggregates Select the correct answer using the code below:





