RUPEE RESERVE AT RS 20BN
The country’s international reserve position as of August this year was at USD 1.1bn, with the Rupee reserve forming Rs 20.5bn and convertible currency reserve at USD 817 mn.
The Rupee reserve in the beginning of the year was Rs 23bn, the highest in 2018. It then fell to Rs 17bn in February and dipped to Rs 11bn in April, after which it gradually picked up. The reserve position is according to the Royal Monetary Authority’s recent monthly statistical bulletin.
On the convertible currency, reserves reportedly improved from USD 802mn in January this year to USD 817mn. Meanwhile, the total reserve is enough to finance 14.3 months of merchandise import and convertible currency reserve alone is sufficient to finance 75.6 months of merchandise import driven in USD. However, the Rupee reserve will meet only 4.4 months of merchandise import driven in Indian Rupees.
Constitutional requirement, however, articulates that a minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.