The forex exchange reserves of India for the first time crossed $400-billion mark on September 8. It showed $400.727 billion as per Reserve Bank of India data. It almost took a decade for the RBI to shore up by $100 billion to cross $400 billion from $300 billion.
The Foreign Currency Assets (FCAs) which mainly accounts purchase and sale of foreign exchange by the RBI, income arising out of deployment of foreign exchange reserves, external aid receipts of the government and revaluation of assets, increased by $2.568 billion to $376.209 billion.
FCAs are expressed in US dollar terms and also include the effect of appreciation or depreciation of non-US dollar currencies, such as the euro, the pound and the yen held in the reserves.
Gold reserves remained stable at $20.69 billion. Special drawing rights (SDR) from the International Monetary Fund, an international reserve asset created by the IMF and is allocated to its members in proportion of their quota at the multilateral agency, rose by $14.2 million from the previous week to $1.52 billion.
Interestingly, India has seen the third-highest reserves accretion globally after Switzerland and China so far in 2017.
The International Monetary Fund (IMF) in its World Economic Outlook (WEO) update on Tuesday maintained India’s growth forecast at an unchanged 7.3% for the current financial year while it slashed the world economic outlook to a mere 3.4% for 2016.
While the report suggests that China’s growth rate will deteriorate further from the projected 6.3 % in the current fiscal year to 6% in 2017, India is expected to grow at a ‘robust pace’ with the country expected to achieve 7.5% growth by the end of next fiscal year.
“India and the rest of emerging Asia are generally projected to continue growing at a robust pace, with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness,” read out the IMF report, as published by DNA.
The report predicts a possible slowdown of world economy, due to erratic foreign exchange fluctuation, China’s economic crisis, and decrease in the prices of commodity goods. According to the report, 70% of the world growth is comprised of developing economies and the world growth is projected at 3.6% for 2016 and 3.8% for 2017.
Fortaleza, Brazil: India will hold the presidency of the new development bank of the group of BRICS countries which will be headquartered in Shanghai, China. The presidency is for a five year term. The decision was taken at the sixth BRICS summit being held at Brazil and the first international event that Prime Minister Narendra Modi is attending.
The development bank which was launched at the annual BRICS summit has alloted $100 billion for development of infrastructure projects in developing countries. It has also set up $100 billion currency reserves pool to help countries short term liquidity pressures.
The bank is set to begin with a capital of $50 billion divided equally between it’s five founders, with an initial total of $10 billion pumped in over seven years and $40 billion in guarantees. The bank is set to start lending in 2016 and would be open to membership by other countries by that time. However the capital share of the BRICS cannot drop below the 55% mark.
The name New Development Bank was suggested by Prime Minister Narendra Modi. The establishment of this bank would be an alternative to the International Monetary Fund bank and the World Bank that has largely been influenced by the Western countries.