24 December, 2019
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Prelims and Mains focus: about Forex and its constituents; why RBI is more keen on investing in US treasuries?
Context: In September 2008, the year that saw the global financial crisis unfold, deposits with other central banks formed more than 57% of the Reserve Bank of India’s (RBI’s) foreign currency assets. US Treasury bonds and other securities had a lower 40% share of the forex kitty.
What explains the increase in the share of this asset class in RBI’s reserves?
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