ANALYSIS OF GROWTH AND VOLATILITY OF RBI FOREIGN EXCHANGE RESERVES

Foreign exchange reserves popularly known as the forex reserves have been in the news recently. Amidst a global pandemic of Covid-19 and a slowing economy for the past few quarters, it is the forex reserves data which has provided a silver lining to the economy. India imposed strictest lockdown measures in the world to curb the spread of the pandemic in the country. Businesses came to a grinding halt and the rupee depreciated quickly to a record low of Rs.76.9088 per dollar in the month of April 2020. Despite this the forex reserves held by the Reserve Bank of India surged past $500 billion. The aim of this paper is to study the factors governing the rise of the forex reserves in the recent past and to give an analysis of the forex reserves data.