India's foreign exchange reserves crosses $355 billion for the first time.

[[Bregs]]

Thanks to the lower oil prices, Rupee now needs to stabilize around 58 then its going to be faster economic growth and further boom in sensex too

 

[PatriotLover]

Even Pakistan Forex reserves are touching record levels, so whats the big deal Indians?

 

[Ryuzaki]

Even Pakistan Forex reserves are touching record levels, so whats the big deal Indians?

Are you comparing $18 billion with $355 billion

 

[Jaat Rock]

It will take us more than 10 years to reach $1 trillion foreign exchange reserve

 

[Archie]

We need to accumulate reserves to 500 Billion USD before some guy in middle East looses his mind and Oil prices start to rise

 

[anant_s]

Long time question How does it help India and common man.

When US Federal reserve will start unwinding its low interest rate policy, we are likely to see an exodus of FII money from India and this will have implication on INR-USD exchange rate as dollar will appreciate. Now this scenario will make Service sector happy (their billing in in USD and more in Indian Rupee) but imports will become costly including Crude.
During these times, RBI sells Dollars in market to keep the rates under check and this is where such large reserves come in handy.

 

[Skull and Bones]

We need to accumulate reserves to 500 Billion USD before some guy in middle East looses his mind and Oil prices start to rise

With recent drive in solar energy, i believe our dependence on middle east is only going to decrease from this point forward.

 

[Levina]

It will take us more than 10 years to reach $1 trillion foreign exchange reserve

And china has about 4 trillion I heard

 

[anant_s]

I read that we need atleast $420 billion to take care of key vulnerabilities, so $360billion is not enough.

No not really. Our CAD is well under control and unlike some economies (like Greece at this instance) we donot have any repayment problems right now.
This amount will be useful whenever there is a shock coming in form of either US Federal rollback or Euro zone crisis for primary stock markets.
But there are 2 things that may help us out:
1. Chinese markets are on a slide (Yesterday People's Bank of China, reduced its interest rates to 4.5%, indicating a slow down). This money (exiting out of Chinese markets) will have to find a place and India is one likely beneficiary.
2. Our GDP has started to show signs of improvement. As companies start showing profits, their valuation will become attractive and hence stock market investments from FIIs is likely to offset, the exodus due to Fed's policy change.
As RBI governor Raghuram Rajan (I'm his big fan) said last year, large reserves are like War Chest to tide upon the rough times.

And china has about 4 trillion I heard

Yes but it took close to three decades of breakneck GDP growth driven by Trade surplus.

 

[Levina]

As RBI governor Raghuram Rajan (I'm his big fan) said last year, large reserves are like War Chest to tide upon the rough times.

He had also predicted a bigger recession which might hit us anytime...by us i meant the entire world.

 

[anant_s]

He had also predicted a bigger recession which might hit us anytime...by us i meant the entire world.

Raghuram Rajan Says World Economy May Be Slipping Into 1930s Depression

London: Reserve Bank of India (RBI) Governor Raghuram Rajan has asked central banks from across the world to define "new rules of the game" as he warned that the global economy may be slipping into problems similar to the Great Depression of the 1930s.

Raghuram Rajan, who has been warning against competitive monetary policy easing by central banks, however, said the situation is different in India where RBI still needs to bring down lending rates to spur investments.

He expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time.

"We need rules of the game in order to effect a better solution. I think it is time to start debating what should the global rules of the game be on what is allowed in terms of central bank action," he said at a London Business School (LBS) conference here last evening.

"I am not going to venture a guess as to how we establish new rules of the game. It has to be international discussion, international consensus built over time after much research and action," Raghuram Rajan said.

"But I do worry that we are slowly slipping into the kind of problems that we had in the thirties in attempts to activate growth. And, I think it's a problem for the world.

It's not just a problem for the industrial countries or emerging markets, now it's a broader game," he noted.

Asked specifically about interest rate cuts from an Indian perspective, Raghuram Rajan said, "I try to shut out market reactions as far as I can. We (India) are still in a situation where we have to spur investment and I am worried more about that."

"So I shut out the asset price (hike) reaction and think more about, is this going to bring bank lending rates down and therefore channel cheaper credit into firms and then they will invest. However, the issue gets much more complicated for other markets," he said.

The Reserve Bank chief was addressing the 'Perspectives' conference organised by AQR Asset Management Institute at the LBS campus on the subject of 'The Central Banker Perspective'.

He highlighted the tremendous pressure for growth which in turn creates enormous pressure on central banks to take action.

Raghuram Rajan stressed that seven years on from the economic crisis, the central banks have done a lot during as well as post-crisis.

"The question is are we now moving into the territory in trying to produce growth out of nowhere we are in fact shifting growth from each other, rather than creating growth.

Of course, there is past history of this during the Great Depression when we got into competitive devaluation," Dr Rajan warned.

Raghuram Rajan also highlighted the need for countries to work together on capital flows, "We have to become more aware of the spill-over effects of our actions and the rules of the game that we have -- of what is allowed and what is not allowed -- needs to be revisited," he said.
Raghuram Rajan Says World Economy May Be Slipping Into 1930s Depression - NDTVProfit.com
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The man usually gets it right as far as economic predictions are concerned. His theory of economies trying to remain competitive by devaluating currency thereby leading other economies to get into a race to bottom is worth read. That is one reason for his policy of RBI of not reducing interest rates in India, despite huge political pressure. He is trying to rein in deficit.
I won't brush aside fears he raised.

 

[ni8mare]

KOLKATA: India's foreign exchange reserves has crossed $355 billion for the first time, Reserve Bank of India data showed.

The reserves rose $1.171 billion in the week to June 19 to $355.459 billion with the central bank intervening in the forex market to nullify the impact of steady dollar flows.

Rupee gains with strong dollar flows but this makes exports less remunerative. RBI sterilises the flow to prevent the rupee gaining sharply when it wants to keep Indian exports competitive in the international market.

RBI does not give any reason behind the weekly movement in the reserves. The rupee closed at 63.62 a dollar compared to previous Friday's 63.52.

RBI data showed that foreign currency assets rose $1.136 billion to $330.717 billion. Foreign currency assets constitute the bulk of the reserves and reflect the change in the value of reserves held in other global currencies, including the euro, pound and yen due to exchange rate movements. Gold reserves remained unchanged at $19.340 billion.

India's foreign exchange reserves crosses $355 billion for the first time - The Economic Times

 

[Midas]

It will take us more than 10 years to reach $1 trillion foreign exchange reserve

After Make in India concept. I think we will touch 1 trillion in 10 years.

 

[The_Sidewinder]

 

[posedion]

China Debt Clock :: National Debt of China

http://www.nationaldebtclocks.org/debtclock/china

Indian Debt Clock

http://www.nationaldebtclocks.org/debtclock/india

With this amount of debt reserves are like lifeline