India prepares well to face global volatility with strong forex reserve

According to the IMF, India's forex reserve of $430 bn, including forwards position, is good enough for both imports as well as covering short-term external debts

As global central banks prepare to withdraw their easy money policy, some jitters are being felt in the emerging markets in the form of reversal of portfolio flows.

Fearing attack on their currency, some central banks have started raising rates. In the region, Philippines and Indonesia hiked their policy rates before the Reserve Bank of India (RBI) moved in. The RBI’s rate hike last week was followed by Turkey.

The first line of defence would be foreign exchange (forex) reserves. According to the International Monetary Fund (IMF), India’s forex reserve of $430 billion, including forwards position, is good enough for