The cost of $400-billion forex reserves

Economists are not betting on great usage of this wealth as these are maintained at a high cost

Anup Roy  |  Mumbai 

India’s foreign exchange reserves at over $400 billion look great. But the portfolio flow-driven accumulation comes with a set of uncertainties and challenges. So, economists and currency dealers are not betting on great usage of this wealth. What the reserves offer for now is improved import coverage of about 13 months, almost double the 2013 level of less than seven months. And, ammunition to arrest a rapid rupee slide if one is triggered, either by actions of the US Federal Reserve or geopolitical uncertainty. However, even that would be limited and the Reserve Bank ...

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First Published: Mon, September 18 2017. 01:56 IST