{"id":21116,"date":"2025-03-16T03:20:14","date_gmt":"2025-03-15T21:50:14","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=21116"},"modified":"2025-04-06T09:57:48","modified_gmt":"2025-04-06T04:27:48","slug":"fer","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/fer\/","title":{"rendered":"Foreign Exchange Reserve"},"content":{"rendered":"<h2>Foreign Exchange Reserve Latest News<\/h2>\n<p>In the sharpest jump in over two years, the country\u2019s foreign exchange reserves increased by $15.267 billion to $653.966 billion recently.<\/p>\n<h2>About Foreign Exchange Reserve<\/h2>\n<ul>\n<li>Foreign Exchange Reserves (also called <strong>Forex Reserves<\/strong>) are <strong>foreign currency assets held by the central banks <\/strong>of countries.<\/li>\n<li>These assets <strong>include foreign marketable securities, <\/strong>monetary <strong>gold<\/strong>, <strong>special drawing rights <\/strong>(SDRs), and <strong>reserve position in the IMF.<\/strong><\/li>\n<li>These are <strong>denominated and expressed in the US dollar, <\/strong>which is the international numeraire for the purpose.<\/li>\n<li><strong>China <\/strong>is the <strong>largest foreign exchange reserve holder <\/strong>in the world.<\/li>\n<li><strong>RBI is the custodian<\/strong> of the foreign exchange reserves in India.<\/li>\n<li><strong>India\u2019s foreign exchange reserves comprise of;<\/strong>\n<ul>\n<li><strong>Foreign currency assets (FCAs):<\/strong> These are maintained in currencies like the US dollar, euro, pound sterling, Australian dollar, and Japanese yen.<\/li>\n<li><strong>Gold<\/strong><\/li>\n<li><strong>SDR <\/strong>(<strong>Special Drawing Rights):<\/strong> This is the reserve currency with the IMF.<\/li>\n<li><strong>RTP <\/strong>(<strong>Reserve Tranche Position):<\/strong> This is the reserve capital with the IMF.<\/li>\n<\/ul>\n<\/li>\n<li>The <strong>biggest contributor<\/strong> to India\u2019s Forex reserves <strong>is foreign currency assets, followed by gold.<\/strong><\/li>\n<\/ul>\n<h2>Foreign Exchange Reserve Purpose<\/h2>\n<ul>\n<li>They ensure that the <strong>country has sufficient liquidity<\/strong> to carry out <strong>foreign exchange transactions or cope with<\/strong> a <strong>balance of payments deficit.\u00a0<\/strong><\/li>\n<li>A central bank can use its foreign exchange reserves (foreign currencies) to <strong>intervene in Forex markets <\/strong>and <strong>influence its currency\u2019s exchange rate.<\/strong><\/li>\n<li><strong>If the value of the Rupee decreases<\/strong> due to an increase in the demand for the foreign currency, then <strong>RBI sells the dollar<\/strong> in the Indian money market so that depreciation of the Indian currency can be checked.<\/li>\n<li>A country with a good stock of forex has a <strong>good image<\/strong> at the international level because the trading <strong>countries can be sure about their payments.<\/strong><\/li>\n<\/ul>\n<h2>Foreign Exchange Reserve FAQs<\/h2>\n<p><strong>Q1<\/strong>. Who has the largest foreign exchange reserves?<\/p>\n<p><strong>Ans<\/strong>. China is the largest foreign exchange reserve holder in the world.<\/p>\n<p><strong>Q2<\/strong>. Who is the custodian of the foreign exchange reserves in India?<\/p>\n<p><strong>Ans<\/strong>. Reserve Bank of India (RBI)<\/p>\n<p><strong>Q3<\/strong>. What constitutes the largest share of India\u2019s Forex reserves?<\/p>\n<p><strong>Ans<\/strong>. The biggest contributor to India\u2019s Forex reserves is foreign currency assets, followed by gold.<\/p>\n<p><strong>Source<\/strong>: <a href=\"https:\/\/www.thehindu.com\/business\/forex-kitty-jumps-sharpest-in-two-years\/article69334838.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p> Foreign Exchange Reserves are foreign currency assets held by the central banks of countries.<\/p>\n","protected":false},"author":5,"featured_media":21117,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-21116","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/21116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=21116"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/21116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/21117"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=21116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=21116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=21116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}