FOREX RESERVES

Countries with the highest foreign reserves according to IMF (June 13, 2021)

1. China – $3,330 Billion
   
   
2. Japan – $1,378 Billion
   
   
3. Switzerland – $1,070 Billion
   
   
4. Russia – $605.200 Billion
   
   
5. India – $605.008 Billion
   
   

What is it?

• Foreign-exchange reserves (also called forex reserves or FX reserves) are reserve assets held by a central bank in foreign currencies.
  
  
• They are used to back liabilities on their own issued currency, support the exchange rate and set monetary policy.
  
  
• Components: India’s foreign exchange reserves comprise
  • Foreign currency assets (FCAs). These are maintained in currencies like US dollar, euro, pound sterling, Australian dollar and Japanese yen.
    
    
  • Gold
    
    
  • SDR (special drawing rights) in IMF: This is the reserve CURRENCY with IMF
    
    
  • RTP (reserve tranche position) in IMF: This is the reserve CAPITAL with IMF