First time India's Forex Reserve cross USD 5 billion

India’s foreign exchange reserve (Forex) has crossed $500 billion first time in the history. In this video Chandraprakash Joshi (Ex AGM RBI) explains –
What is Forex – Foreign Exchange Reserve? What are its components?
How Forex increases and decreases? Impact of FDI and FII and import and export on forex.
Is large reserve good for India? What are the advantages and how this money can be used?

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You will understand that –
FCA are capital inflows to the capital markets, FDI and ECB, held like US treasury bills
SDRs are units of accounts for the IMF, allocated by the IMF to countries, and cannot be held or used by private parties
The IMF is funded through its members and their quota contributions. The reserve tranche is a kind of emergency account that IMF members can access at any time

The example of Facebook’s investment in Reliance Jio and JLR’s acquisition by Tata will help you understand the reason for growth and decline in the foreign exchange reserves of India.

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