Sunday, December 21, 2003
India's forex reserves cross $100 billion
The inevitable has finally happened. India's forex reserves have crossed the $100 billion mark. Not bad at all for a country that was on the verge of default some 12 years back and had pledged its gold reserves. The recent surge in forex reserves are probably due to the depreciation of the dollar against other currencies rather tremendously increased inflows.
By my rough calculations, the top 10 Asian economies now hold about $1.5 trillion in forex reserves. Japan has about $600 million, while China has about $350 billion. Throw in India, Taiwan and South Korea and you get close to that figure. Obviously having huge reserves gives politicians something to crow about. But is it time for these Asian economies to rethink whether it wants to continue lending money to the U.S. -- at about 4% -- so American consumers can continue to indulge their profligate ways? Perhaps.
By my rough calculations, the top 10 Asian economies now hold about $1.5 trillion in forex reserves. Japan has about $600 million, while China has about $350 billion. Throw in India, Taiwan and South Korea and you get close to that figure. Obviously having huge reserves gives politicians something to crow about. But is it time for these Asian economies to rethink whether it wants to continue lending money to the U.S. -- at about 4% -- so American consumers can continue to indulge their profligate ways? Perhaps.
