India’s forex reserves cross record $600 billion-mark for first time

Assam Current affairs : In today’s daily Assam Current affairs season we will discuss about the recent development on India’s forex reserves.

Daily Assam Current affairs :

Daily Assam Current affairs

Highlights :

• India’s forex reserves crossed $600 mark for the first time and as on June 4, it stood at $605 billion. With this, India equals Russia as the fourth largest reserve holder worldwide.

• India’s forex reserve was $605.008 billion while for Russia it was $605.2 billion.

• It took a year for reserves to rise by $100 billion. Huge forex reserves have improved India’s import cover substantially.

Forex reserves or Foreign exchange

Forex reserves are assets on reserves which are held by financial organization(Central Bank) in foreign currencies. It includes bonds, treasury bills and other government securities. Biggest number of the foreign exchange reserves are held in U.S. dollars. These reserves serve several purposes and make sure that central bank has backup funds in case national currency rapidly becomes insolvent or devaluate. India’s Forex Reserves include- Foreign Currency Assets(Dollar,Euro),Gold, Special Drawing Rights and Reserve position with International Monetary Fund (IMF).

Foreign Currency Assets

Assets which are valued on the basis of currency, apart from own currency of any country are called as foreign currency assets. It is the most important and largest component of forex reserve and is expressed in dollar terms.

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