Indian Foreign Exchange

Reserves cross $500Billion

India crossed the $500 The only good aspect in the Indian Economy in this catastrophic
billion mark for the situation of COVID-19. The mark of $500 Billion was achieved on
first time 5th June 2020 after the increase of $8 Billion in a week. The GDP

0growth had been adversely affected due to COVID-19 as small

scale production have shut down over a long period of time. Anyhow, due to this increase in
Foreign Exchange reserve India will have a better chance to improve and revive its economic
condition in post COVI-19 scenario.

The reason for this all-time high in Foreign Exchange reserve are as follows:

• Crude oil: The demand for crude oil has decreased due to low demand as the
consumption level has decreased as a result of lockdown. Thus, less import means no
outside payment to foreign exporters in dollar.
• Foreign Investment: There has been huge foreign investment in JIO company thus the
inflow of dollar has increased leading to increase in the
reserve.
• Overall decrease in Import: Due to pandemic the overall
import of materials required for production has also decrea
-sed as the production has temporarily shut down for many
small scale producing industries.

Foreign Exchange comprised of – Foreign Currency

Asset ($463.63 billion),Gold ($32.35 billion) Special

drawing rights IMF ($1.44 billion), Reserve position in IMF ($4.28 billion)

• https://www.business-standard.com/article/finance/india-s-foreign-exchange-reserves-cross-500-bn-for-the-
first-time-120061201146_1.html

• https://indianexpress.com/article/explained/why-indias-forex-reserves-are-rising-and-what-this-means-for-
indias-economy-6456852/
-AASHISH MISHRA (1820602) - 5 BBA F