The total foreign exchange reserves (comprising foreign currency assets, gold, special drawing rights and reserve tranche position in IMF) was US$ 304.8 billion at end-March 2011, US$ 294.4 billion at end-March 2012 and US$ 292.0 billion at end-March 2013. In the current fiscal, reserves stood at US$ 295.2 billion as on April 12, 2013.

The level of foreign exchange reserves is largely the outcome of the RBI’s intervention in the foreign exchange market to smoothen exchange rate volatility, valuation changes due to movement of the US dollar against other major international currencies and inflow of aid receipts.

The rising import bill is usually financed adequately by the export earnings, invisible receipts and capital flows.

This was stated by Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in the Lok Sabha today.

DSM/RS/ka

(Release ID :95161)

Foreign exchange reserves policy: central bank intervention stabilises currency and reserves amid valuation shifts and capital flows. The press release reports the composition and levels of foreign exchange reserves and attributes those levels to central bank intervention to smooth exchange rate volatility, valuation effects from US dollar movements, and inflows including aid receipts; it further explains that rising import bills are typically financed by export earnings, invisible receipts and capital flows.