India's Forex reserves at All Time High of $375.71 billion Dollars

[Sloth 22]

Goes to show you don't understand economics in general and forex reserves in particular.

More tax collection => more money with government => less budget deficit => less pressure on Reserves.

 

[Bussard Ramjet]

More tax collection => more money with government => less budget deficit => less pressure on Reserves.

That is what you don't understand.

Forex reserves are foreign exchange. They have very little to do with domestic currency.

Less budget deficit is good for money flowing in. But it is only one small factor. There are many many factors here.

The most important ones are exports and trade figures.

 

[Chhatrapati]

That is what you don't understand.

Forex reserves are foreign exchange. They have very little to do with domestic currency.

Less budget deficit is good for money flowing in. But it is only one small factor. There are many many factors here.

The most important ones are exports and trade figures.

Agree on importance of export and trade figures. But, Forex has very high impact on domestic currency. It decreases pressure on domestic currency too.

 

[Sloth 22]

That is what you don't understand.

Forex reserves are foreign exchange. They have very little to do with domestic currency.

Less budget deficit is good for money flowing in. But it is only one small factor. There are many many factors here.

The most important ones are exports and trade figures.

Less Budget Deficit => Better position of INR => Cost of Oil is decreased=> Savings !

 

[Jacob Martin]

We have added 9.1 Million more tax payers, due to demonetisation. This should also help in the cause.

It will not do any such thing. Indians pay their taxes in INR, not in foreign currency.

 

[Sloth 22]

It will not do any sForexing. Indians pay their taxes in INR, not in foreign currency.

More tax => Less Budget Deficit => Less Loans taken => Less pressure on Reserves

 

[Jacob Martin]

More tax => Less Budget Deficit => Less Loans taken => Less pressure on Reserves

Forex loans are not taken for meeting internal borrowing requirements. That is done by issuing government treasuries such as interest-bearing bonds.

Foreign exchange reserves represent the sum total of money parked by FII/FPI, money received from exports and sale of assets, and IMF reserves. So any liability on these reserves is also of the same nature. Deficit financing has nothing to do with forex reserves.

However, there is a very small indirect correlation between the two. If the fiscal deficit is very vast, then there is automatic pressure on the currency to devalue. This would reduce the value of forex reserves held in hard currency to that extent.

 

[Thəorətic Muslim]

Forex reserves are foreign exchange. They have very little to do with domestic currency.

Less Budget Deficit => Better position of INR => Cost of Oil is decreased=> Savings !

@Nilgiri

 

[kris]

If you do a little simple math with the figures from 2016 to 2017, how much India has grown compare it with HK, perhaps you may change your prediction, don't forget HK figures stop in Jan 31 2017 while India at May
Oh well anyway good luck bro

We are also changing financial year to jan-dec

you are right....but Hong Kong is just short term....target to be trillion dollar reserve in 5 years

But how??

 

[Nilgiri]

@Nilgiri

He qualified with "little" and "low" correlation (rather than zero)...so I got no bug to bear with that overall.