AN ECONOMIC ANALYSIS OF FOREIGN EXCHANGE RESERVE MANAGEMENT IN INDIA

Foreign Exchange Reserve Management is an important part of the financial system of the country. The Foreign Exchange Reserve Management plays a vital role in the Globalised Economy of recent days. The deposits of foreign currency held by a central bank of the country is known as Forex Reserve. Holding the currencies of other countries as assets allow governments to keep their currencies stable and reduce the economic problems. The use of foreign exchange reserves became popular after the decline of the gold standard. Foreign-exchange reserves generally are only the foreign currency deposits and bonds held by central banks and monetary authorities. However,

the term in popular usage commonly includes foreign exchange and gold, special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions. This is known as official international reserves