Short-term dollar pressures should not distract India from the need to diversify its forex holdings
Foreign currency assets (FCA) made up 81.1% of these and gold 16.7%. Note that FCA includes foreign currency investments in Treasury bonds and the like, as well as deposits denominated in mainstream currencies such as the dollar, euro, pound and yen, plus others such as those of Australia, Canada and Sweden. Between March and August, India’s forex reserves increased by 5.5% and its FCA by 7%.
