Question- Consider the following statements-
(1) India’s foreign exchange reserves crossed $600 for the first time.
(2) India equals to Russia as the fourth largest reserve holder in the world.
Select the correct answer using the code given below-
(a) Only 1
(b) Both 1 and 2
(c) Only 2
(d) Neither 1 nor 2
Ans.(b)
Related Facts-
- India’s foreign exchange reserves crossed $600 for the first time.
- As on June 4, the foreign exchange reserves stood at $605 billion, almost tying with Russia as the fourth largest reserve holder in the world.
- While India’s forex reserve was $605.008 billion, Russia’s was $605.2 billion.
- It took just about a year for the reserves to rise by $100 billion.
- The huge accumulation of reserves has also improved India’s import cover substantially.
- The reserves are invested in foreign assets, such as US treasury bonds. However, in a low yield environment, the RBI is also struggling to generate enough returns on its investments.
- The annual report for 2020-21 showed that the rate of earnings on foreign currency assets was at 2.1 per cent in FY21, compared with 2.65 per cent a year ago.
By- Yogesh Pratap Singh