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Below are Views On Forex Reserves Update by Heena Naik, Research Analyst - Currency, Angel Broking Ltd

Forex Reserves Update

The International Monetary Fund has made an allocation of Special Drawing Rights (SDR) equivalent to around $17.86 billion to India. With this, the total SDR holdings of India now stands equivalent to around $19.41 billion as on August 23, 2021. This increase in SDR holdings will be reflected in the Forex Reserves data that shall be published tomorrow for the week ended August 27, 2021.

In simple terms, SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. So far, the largest-ever allocation of around $943 billion has been approved for various nations on August 2, 2021 (effective on August 23, 2021) out of which $17.86 billion was made to India. This huge allocation was to address the long-term global need for reserves and help countries cope with the impact of the COVID-19 pandemic.

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