India has stepped ahead of Russia in terms of the size of foreign exchange reserves held by the central bans of the world. By edging out Russia from the 4th place, India is just behind China, Japan and Switzerland, according to the latest tally.
Though India's forex reserves slipped from the peak of $590 billion it hit in the last month, it's ahead of Russia currently, with $580.3 billion as against Russia's $580.1 billion, Bloomberg reported.
The bulging of India's forex kitty in recent times was caused by the central bank's move to keep dollars in order to protect the economy against sudden outflows in the volatile times.
At the moment, India's forex reserve are enough to last 18 months of imports according to data. For comparison, India's foreign exchange reserves had declined to a meagre $5 billion in 1991, due to the balance of payments crisis. At that level the forex reserves would have lasted only three weeks of imports.
Now, with strong foreign exchange numbers, India is a "net creditor", the junior minister finance, Anurag Singh Thakur, had said in February.
Now a Net Creditor
"If you see India's forex reserves, India has forex reserves more than USD 590 billion, which is the highest ever. And it is up by USD 119 billion from the previous year. And if you look at the external debt, it is only USD 554 billion. So considering the forex reserves, India is now a net creditor," the minister said, according to the Business Today.
The minister added that India's forex scenario was bolstered by the V-shaped economic recovery the country posted after the battering caused by the coronavirus pandemic.
India's strong showing on the forex front will make it more appealing to foreign investors, according to analysts.