Forex or foreign exchange reserves are an important resource for the central bank of a country. It can be used by the central bank to help the domestic currency. When the domestic currency weakens in the international markets, the central bank could use its kitty of forex reserves to repurchase the domestic currency from the international markets. This can help in stabilizing the currency's value. Therefore, we thought of evaluating the position of India vis-a-vis its BRIC peers in terms of forex reserves. Interestingly, India lags behind all the other BRIC countries in this regards. It must be noted that large forex reserve balance can be used by a country to manipulate its exchange rates to provide itself a more favourable economic environment. Something that China has been accused of by other developed nations. And with a reserve in excess of US$ 3 trillion, it is quite understandable as to why it has come under the firepower of such accusations.
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