 "Nirmala Sitharaman, Nirmala")
Amid fluctuations in forex reserves, Union Finance Minister Nirmala Sitharaman on Tuesday assured Rajya Sabha that India’s foreign exchange reserves are strong and sufficient to manage the country’s current account deficit.
"On the foreign exchange reserve and how our current account deficit is being managed and a sense of worry which comes out and rightly, in the minds of the members of Parliament, I just want to assure you that as of 21st March 2025, total foreign exchange reserve is $658.8 billion," Sitharaman said in Rajya Sabha.
Her remarks came after several opposition members raised concerns about the country's financial position, particularly regarding fluctuations in forex reserves. Addressing these concerns, Sitharaman highlighted India's global standing in terms of forex holdings.
"We are the fourth largest in terms of foreign exchange reserves that any country holds, which means the amount that we hold in foreign exchange reserves is good enough to take care of 11 months of our imports," she noted.
According to a report by The Economic Times, some lawmakers questioned whether recent changes in the reserves were due to interventions by the Reserve Bank of India (RBI) in currency markets. However, the finance minister dismissed these concerns and assured that the reserves remain stable and well-managed.
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Citing the latest figures, she reiterated that India's total foreign exchange reserves stood at $658.8 billion as of March 21, 2025. This places India among the top global holders of forex reserves and ensures financial stability, she said.
"What this means," Sitharaman explained, "is that we have enough forex reserves to cover up to 11 months of imports—a position of strength that no country can take lightly. It gives us the cushion to absorb shocks and manage fluctuations in the global economy effectively."
She acknowledged a slight decline in reserves but reassured lawmakers that the drop was not a cause for concern.
India’s forex reserves play a crucial role in stabilising the rupee and ensuring that the country can meet international financial obligations without relying on external borrowing. They also provide a buffer against global economic uncertainties, allowing India to maintain financial security in challenging times.
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