Adequacy of Foreign Exchange Reserves

  • Is the quantum of reserves sufficient now? “The current level of reserves at $ 350 billion as well foreign currency assets at $ 326 billion both seem to be adequate.
  • However, if the yuan falls sharply, the rupee will also come under intense pressure.
  • Further, if Hong Kong were to adjust or abandon its U.S. dollar peg, it may turn out to be worse in terms of its impact on India”, says Sivaprakasam, MD of Argonaut Global Capital.