Forex Reserves
Forex reserves (also called FX reserves or foreign exchange reserves), are cash and other reserve assets held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets. Reserves assets allow a central bank to purchase the domestic currency, which is considered a liability for the central bank (since it prints the money or fiat currency as IOUs).
Reserves are held in one or more reserve currencies, nowadays mostly the United States dollar and to a lesser extent the euro. Foreign exchange reserves assets can comprise banknotes, deposits, bonds, treasury bills and other government securities of the reserve currency. Some countries hold a part of their reserves in gold, and special drawing rights are also considered reserve assets. Often, for convenience, the cash or securities are retained by the central bank of the reserve or other currency and the "holdings" of the foreign country are tagged or otherwise identified as belonging to the other country without them actually leaving the vault of that central bank. From time to time they may be physically moved to the home or other country. Normally, interest is not paid on foreign cash reserves, nor on gold holdings, but the central bank usually earns interest on the government securities.
A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store of value, or to support the value of the national currency.
Forex reserves (also called FX reserves or foreign exchange reserves), are cash and other reserve assets held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets. Reserves assets allow a central bank to purchase the domestic currency, which is considered a liability for the central bank (since it prints the money or fiat currency as IOUs).
Reserves are held in one or more reserve currencies, nowadays mostly the United States dollar and to a lesser extent the euro. Foreign exchange reserves assets can comprise banknotes, deposits, bonds, treasury bills and other government securities of the reserve currency. Some countries hold a part of their reserves in gold, and special drawing rights are also considered reserve assets. Often, for convenience, the cash or securities are retained by the central bank of the reserve or other currency and the "holdings" of the foreign country are tagged or otherwise identified as belonging to the other country without them actually leaving the vault of that central bank. From time to time they may be physically moved to the home or other country. Normally, interest is not paid on foreign cash reserves, nor on gold holdings, but the central bank usually earns interest on the government securities.
A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store of value, or to support the value of the national currency.
SUBJECT Variables
TOTAL RESERVES
- In nominal terms (including the valuation effects), the total value of all foreign exchange reserves held by India as of Mar'24 was USD 646.4 billion - a 10% increase over the preceding half-year period.
- 88.3% of the total foreign exchange reserves as of Mar'24 were held in foreign currencies and 8.1% in gold. Only 3.5% of reserves were held in SDR and RTP.
- 88.3% of India's total foreign exchange reserves as of Mar'24 were held in foreign currencies
- India held USD 571 billion of foreign currency reserves across a basket of currencies in Mar'24, a 9.5% increase over the preceding half-year period.
- On a balance of payments basis (i.e. excluding valuation changes), foreign exchange reserves increased by USD 32.9 billion during Apr-Dec'23 as compared with a decrease of USD 14.7 billion in the corresponding period of the previous year.
- The valuation gain, reflecting the depreciation of the US dollar against major currencies, amounted to USD 11.1 billion during April-Dec'23 as against a valuation loss of USD 29.9 billion during the corresponding period of the previous year.
- 8.1% of India's total foreign exchange reserves as of Mar'24 were held in gold. India held USD 52.7 billion of gold reserves as of Mar'24.
- The total volume of gold held in reserves as of Mar'24 was 822.1 tonnes, compared to 800.8 tonnes in the preceding half-year period.
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