Forex Reserves: According to an RBI report, the country’s foreign exchange reserves (forex reserves) fell by $28.05 billion to $607.31 billion at the end of March this year from $635.36 billion at the end of September 2021.
As part of its efforts to improve transparency and levels of disclosure, the Reserve Bank of India (RBI) publishes half-yearly reports on the management of foreign exchange reserves (forex reserves).
These reports are produced every six months and are based on the situation as of the end of March and September of each year. The current report, the 38th in the series, is based on the situation as of the end of March 2022.
Forex reserves decreased
“Reserves decreased from $635.36 billion at the end of September 2021 to $607.31 billion at the end of March 2022 during the half-year period under review,” the Reserve Bank of India (RBI) said in a report released on Thursday.
The foreign exchange reserves are denominated and expressed in US dollars, despite the fact that both the US dollar and the Euro are intervention currencies and the Foreign Currency Assets (FCA) are held in major currencies.
The FCA fluctuates primarily due to RBI’s purchases and sales of foreign exchange, income from the deployment of foreign exchange reserves, the central government’s receipts of external aid, and changes due to asset revaluation.
At the end of March 2022, RBI’s net forward asset (receivable) in the domestic foreign exchange market was $65.79 billion. Foreign exchange reserves’ cover of imports (on a balance of payments basis) fell to 13.1 months in December 2021 from 14.6 months in September 2021.
The RBI held 760.42 metric tonnes of gold as of March 31, 2022
The RBI held 760.42 metric tonnes of gold as of March 31, 2022 (including gold deposits of 11.08 metric tonnes), according to the central bank.
While 453.52 metric tonnes of gold are held in safe custody abroad with the Bank of England and the Bank for International Settlements (BIS), 295.82 metric tonnes of gold are held in the United Kingdom. According to the report, gold’s share of total foreign exchange reserves increased from about 5.88 percent at the end of September 2021 to about 7.01 percent at the end of March 2022. In March, $363.03 billion of the $540.72 billion FCA was invested in securities, $140.54 billion was deposited with other central banks and the BIS, and $37.16 billion was deposited with commercial banks in other countries.