01-19-2004, 12:31 AM
<b>We do have foreign exchange reserves of $ 82 billion dollars but we also borrowed $ 90 billion dollars for infrastructure projects. More over with the US economy sliding and dollar falling, a ten percent decline in US dollar price will wipe out the purchasing power of $ 8.2 billions for our dollar reserves. </b>
Are you sure this is true? My understanding is that the ratio of foreign currencies that RBI maintians is a secret. Infact through out most of 2003 when Dollar value was falling the value of our reserves increased because of revaulation of foreign currencies. Which means not only do we hold Dollar but also other currencies. So if Dollar goes down against let's say Euro then our reserves also reflect this fact. Our portion of reserves in DOllars goes down but another portion of reserves that we held in Euro goes up. So When dollars falls by 10% , it does not mean out of 82billion dollars reserve we lose 8.2 billion dollars.
This fact shows how much you know about Foreign exchange reserves India holds. Since you are writing about economics and have zero knowledge about it, I would say better bring good arguments or just shut up.
Are you sure this is true? My understanding is that the ratio of foreign currencies that RBI maintians is a secret. Infact through out most of 2003 when Dollar value was falling the value of our reserves increased because of revaulation of foreign currencies. Which means not only do we hold Dollar but also other currencies. So if Dollar goes down against let's say Euro then our reserves also reflect this fact. Our portion of reserves in DOllars goes down but another portion of reserves that we held in Euro goes up. So When dollars falls by 10% , it does not mean out of 82billion dollars reserve we lose 8.2 billion dollars.
This fact shows how much you know about Foreign exchange reserves India holds. Since you are writing about economics and have zero knowledge about it, I would say better bring good arguments or just shut up.