RBI Releases 43rd Half-Yearly Report on Forex Reserves

Why in the news?

The Reserve Bank of India announced its latest report on foreign exchange reserves, detailing a total of $688.27 billion as of October 18, 2024, enhancing transparency.

RBI Releases 43rd Half-Yearly Report on Forex Reserves

About the RBI Publishes 43rd Half-Yearly Report on MFER:

  • Report Release: The Reserve Bank of India (RBI) released its 43rd half-yearly report on the Management of Foreign Exchange Reserves (MFER) for the period from April to September 2024.
  • Foreign Exchange Reserve Status: As of October 18, 2024, India’s total foreign exchange reserves amount to USD 688.27 billion. The breakdown is as follows:
  • Foreign Currency Assets (FCA): USD 598.24 billion
  • Gold Reserves: USD 67.44 billion
  • Special Drawing Rights (SDRs): USD 18.27 billion
  • Reserve Tranche Position (RTP): USD 4.32 billion
  • Transparency and Disclosure: The RBI began compiling half-yearly reports in February 2004 to enhance transparency and improve public disclosure regarding the management of India’s foreign exchange reserves. This initiative aims to provide stakeholders with better insights into reserve management practices.

About Foreign Exchange Reserves (Forex Reserves):

  • Definition: Foreign Exchange Reserves (Forex Reserves) are reserve assets held by a central bank in foreign currencies, including currencies, bonds, treasury bills, and government securities.
  • Custodian: The Reserve Bank of India (RBI) manages India’s foreign exchange reserves.
  • Composition: India’s Forex reserves include:
  • Foreign Currency Assets (FCAs): Maintained in currencies like USD, Euro, Pound Sterling, AUD, and JPY.
  • Gold: A significant portion of reserves.
  • Special Drawing Rights (SDRs): Reserve currency from the IMF.
  • Reserve Tranche Position (RTP): Reserve capital with the IMF.
  • Purpose:
  • Supports liabilities on issued currency and stabilises exchange rates.
  • Acts as backup funds in case of national currency devaluation.
  • Enhances international credibility, attracting foreign trade and investment.

Associated Article:

https://universalinstitutions.com/indias-forex-reserves-surpass-700-billion-milestone/