In market there has been talk and concern over RBI’s falling reserves. However over view is that reserve at current levels are okay and here are the reasons why:
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1. Despite reserves falling to USD 393 Bn from USD 424 Bn still they are well above then Oct’17
2. Over last 10 years, in 1st 5 years reserves were nearly flat between USD 257 Bn to USD 277 Bn (2009-2013). Its only in last 5 years that reserves have seen sharp buildup from USD 285 Bn to USD 409 Bn
Hence in overall prospective, a dip in reserve of USD 31 Bn used for market intervention is okay.
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