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In recent times, India’s forex reserves have been slowly but surely increasing. ... The main reason for this happy feeling is that the country’s forex reserves are now adequate to meet nearly 12 months of imports (Last year, the country imported goods and services worth $50. ... But we must not forget that a small country like Singapore has $ 80 billion of reserves while the Special Administrative Region (SAR) of Hong Kong has
$111 billion. China, our biggest emerging threat in international markets has forex reserves amounting to $217.4billion Adequacy of a country’s forex reserves should be judged in relation to the demand for its own currency. ... But the exchange rate is not determined solely by the relative demand for a country’s goods and services. That is why, the US Dollar has continued to appreciate in recent times in spite of a persistent current account deficit. ... That is why, buying interest in the US dollar has not subsided even after the September 11 terrorist strike on the World Trade Center in New York.
Approximate Word count = 767
Approximate Pages = 3.1
(250 words per page double spaced)
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