India on U.S.’s Currency Watchlist

  • IASbaba
  • April 23, 2021
  • 0
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India on U.S.’s Currency Watchlist

Part of: GS Prelims and GS-II International Relations 

In news

Key takeaways 

  • Another trigger for the inclusion on the currency watchlist is a trade surplus of $20 billion or more.
  • India’s trade surplus with the U.S. grew by about $5 billion to $23 billion in 2020-21 as imports fell more sharply than exports in the COVID-affected year.
  • According to India, the RBI had been taking necessary steps to maintain stability in the financial markets and not accumulating forex reserves. 
  • It is a mandate of the central bank to provide stability in the currency as a result of which central banks buy and sell foreign currency. 
  • India’s overall reserves have been fairly steady at $500 billion to $600 billion.

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