India forex reserves up marginally to $295.6 billion

India's foreign exchange reserves climbed marginally to $295.6 billion at the end of December last year, from $294.4 billion in March 2012.

According to latest Economic Survey 2012-13 presented by country's Finance Minister, P. Chidambaram in the Lok Sabha on Wednesday, on month-on-month basis forex reserves remained in the range of $ 286.0 billion (at end-May 2012) to $ 295.6 billion (at end-December 2012).

At this level, reserves provided about seven months of import cover, the Survey observes.

India’s foreign exchange reserves comprise foreign currency assets (FCA), gold , special drawing rights (SDRs) and reserve tranche position (RTP) in the International Monetary Fund (IMF).

The level of foreign exchange reserves is largely the outcome of the Reserve Bank of India (RBI) intervention in the foreign exchange market to smoothen exchange rate volatility and valuation changes due to movement of the US dollar against other major currencies of the world.

Courtesy : Bullion Street