The total foreign exchange reserves (comprising foreign currency assets, gold, special drawing rights and reserve tranche position in IMF) was US$ 304.8 billion at end-March 2011, US$ 294.4 billion at end-March 2012 and US$ 292.0 billion at end-March 2013. In the current fiscal, reserves stood at US$ 295.2 billion as on April 12, 2013.
The level of foreign exchange reserves is largely the outcome of the RBI™s intervention in the foreign exchange market to smoothen exchange rate volatility, valuation changes due to movement of the US dollar against other major international currencies and inflow of aid receipts.
The rising import bill is usually financed adequately by the export earnings, invisible receipts and capital flows.
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