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India’s Foreign Exchange Reserves: India’s foreign exchange reserves increased by $392 million to $687 billion in the week ended January 9. This information was given by the Reserve Bank of India (RBI) on Friday. RBI said that in the week ending January 9, the value of gold reserves, an important component of foreign exchange reserves, increased by $ 1.56 billion to $ 112.83 billion.

One reason for the increase in gold reserves is the rapid rise in gold prices. The price of gold in the international markets has increased by about 2.5 percent in the last one week and by about 5.5 percent in the last one month. The value of Foreign Currency Assets (FCA), the largest component of foreign exchange reserves, declined by $ 1.12 billion to $ 550.86 billion.

FCA includes other currencies along with the dollar

Let us tell you that along with the dollar, FCA includes other major currencies of the world like Yen, Euro and Pound, whose value is expressed in dollars. According to RBI, the value of SDRs declined by $39 million to $18.73 billion in the week ending January 9. The value of reserve positions in the IMF has decreased by $ 13 million to $ 4.758 billion.

How important are foreign exchange reserves for a country?

for any country foreign exchange reserves It is very important and it gives an idea of ​​the economic condition of that country. Apart from this, it plays a big role in keeping the exchange rate of currency stable. For example, if in a situation there is more pressure on the rupee against the dollar and its value decreases, then the central bank can use foreign exchange reserves to prevent the rupee from falling against the dollar and keep the exchange rate stable.

easy to do business abroad

The increasing foreign exchange reserves also show that the inflow of dollars into the country remains large and this strengthens the country’s economy. Besides, with its increase it also becomes easier for the country to do business abroad.