FOREX RESERVES SUFFICIENT TO COVER TEN MONTHS OF IMPORTS

Published on Dec 29, 2023 12:21

India�s external vulnerability indicators continue to show improvement stated the Reserve Bank of India (RBI) in a latest update. The foreign exchange reserves of US$ 616.0 billion as on December 15, 2023, are sufficient to cover about ten months of actual imports (on a BoP basis) for 2022-23; external debt moderated to 18.6 per cent of GDP in June 2023; and the share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.6 per cent in June 2023. The stability of the exchange rate has helped in absorbing external shocks and mitigating the impact of global spillovers on domestic macroeconomic and financial stability. Exchange rate stability is also reflected in steady fall in implied volatility derived from option prices and compression of onshore-offshore spreads.