Forex reserves (FER) hit a new lifetime high of $410 billion
Foreign Exchange Reserves (FER), crossed the $400 billion.
It has touched a new lifetime high of $409.366
billion aided by an increase in foreign currency assets.
In the previous week, foreign exchange reserves had spurted
by $3.53 billion to reach $404.921 billion.
On September 8, the Forex Reserves had crossed the $400
billion mark for the first time at $400.727 billion and again after five weeks
on December 1 at $400.742 billion.
The rise in India’s Forex Reserves was lauded by both
Moody’s and S&P recently while evaluating the credit rating of the country,
even as the US treasury frowned at the record stock.
According to the DBS group, India’s Forex reserves are a
win-win situation if any international crisis arises amidst the fiscal slippage
fear due to the crude oil price hovering over $65 per barrel.
The current Forex reserves are enough to cover close to 11
months of import.
Earlier, the RBI took just 11 months to reach the
$300-billion mark in February 2008 from $200 billion of reserves it had in
But since then it stood between $300 and $400, falling to
nearly $399 billion.
India’s foreign reserves rose sharply driven by portfolio
inflows, investment flows and a narrower current account deficit, it added.
However, the RBI did not specify the reason for the surge.
The US Treasury uses three criteria to determine
manipulation: Bilateral trade surplus with the US to $20 billion, current
account surplus at 3% of country’s GDP, and net purchases of foreign currency
to 2% of country’s GDP over a year.
India’s foreign exchange buying had surged to 1.8% in 12
months till June, which was close to the 2% limit, but had not crossed it.