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India@75: Forex reserves multiply 355 times since independence


NEW DELHI: India’s foreign exchange reserves witnessed a massive jump in comparison to its level in the initial stages after independence.
A country’s foreign reserve position provided a cushion against unforeseen eternal shocks.
In 1951-52, forex reserves stood at a mere $1.82 billion and remained below this level for next 2 decades.
The graph below shows stagnancy in rise in forex reserves as the economic battled post-independence growth challenges.
With major restrictions imposed on trade, India was spending more of its reserves than adding to it.
However, the economic policy reform of 1991 changed the scenario. The pace of addition to India’s forex reserves was much faster than before.

Since the 1990s, there was 60 times rise in forex reserves and held the fourth largest reserves (as of November 2021) in the world.
However, certain depletion in the reserves have been observed since the past years, leading to continued outlay.
According to data by Reserve Bank of India (RBI), foreign exchange reserves declined $897 million to $ 572.978 billion in the week ended August 5.





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