The forex reserves of the country not only logged the $400 billion mark but also hit a new lifetime high of $409.366 billion backed by an increase in assets in foreign currency.
The foreign credit rating agencies including Moody's and S&P have been highly upbeat about the increased forex to such levels while computing credit rating. And it is expected that current forex with the government is sufficient to meet the imports for 11 months.
And at a time when the chances of the country breaching its fiscal deficit target of 3.2% of the GDP have been heightened due to spurt in crude oil prices to levels over $65 per barrel and lower GST collection, the increased foreign reserve is a big positive for the Indian economy.
The surge is attributable to increase in investment inflows, portfolio inflows as well as a narrower current account deficit or CAD. DBS said, the stock is enough to handle any global risks.