Inputs by Paridhi Agarwal
On May 12th, 2023, RBI updated the forex and gold reserves of the country. This report is released by the Reserve Bank of India once a week.
As of 5th May 2023, India had forex reserves of 5.26 billion USD.
The gold reserves stood at 4.6 billion USD. In physical quantity, RBI reported having 794.64 metric tonnes of gold at the end of March, 2023.
What are gold reserves?
Gold reserves are the physical gold held by the central bank of a country. These are usually a portion of the nation’s wealth and are stored in the form of gold ingots (a block of gold or other metal, usually oblong in shape)
Why are they important?
There can be many reasons for a country having gold reserves, but the main reason is that they provide insurance if a country ever goes into an economic crash. The current financial system(physical) is based on flat currency: paper (or digital) money, which has no physical assets to back it.
So, in the worst-case scenario, if the flat currencies of a country sink or become worthless/near worthless, they will still have physical gold to repay debts and issue more money.
Forex reserves of other countries
USA
As of 3rd March 2023 the foreign-exchange reserves are at 2.4 millions USD.
Japan
As of 30th April 2023, the forex reserves were at 1.2 million USD.
China
As of March 2023, the forex reserves were at 3.3 million USD. This is the public figure.
France
As of October 2022, the forex reserves were at 2.3 million USD.