India Adjusts Forex
Currently the sixth largest in the world, India’s reserve is a record high of $142.55 billion and a mix of mostly U.S. Dollars, Sterling pounds, Euro and Yen. The current composition of India’s reserve prompted moves to adjust it to achieve the benefits from the diversification of currency risk.
The adjustment in India’s foreign exchange reserve composition makes it now dependent to developments in global forex markets and external trade patterns. According to the country’s finance minister, it is a common practice of central banks around the world to make appropriate adjustments in the currency composition of their foreign exchange reserves from time to time. Emerging central banks of Asian countries have already diversified their foreign exchange reserves and have invested their dollars in U.S. Treasuries, which, in turn, prompted the Dollar’s decline in the past.
India’s finance minister released these details in a letter addressed to their upper house of parliament after a lawmaker questioned the government’s steps to expose India to the U.S. Dollar.
Source: Govt Makes Adjustments In Forex Reserves, www.sify.com
The adjustment in India’s foreign exchange reserve composition makes it now dependent to developments in global forex markets and external trade patterns. According to the country’s finance minister, it is a common practice of central banks around the world to make appropriate adjustments in the currency composition of their foreign exchange reserves from time to time. Emerging central banks of Asian countries have already diversified their foreign exchange reserves and have invested their dollars in U.S. Treasuries, which, in turn, prompted the Dollar’s decline in the past.
India’s finance minister released these details in a letter addressed to their upper house of parliament after a lawmaker questioned the government’s steps to expose India to the U.S. Dollar.
Source: Govt Makes Adjustments In Forex Reserves, www.sify.com
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