India’s foreign exchange reserves touched new height recently. This also gives rise to the argument of lost opportunity. In light of this discuss the utility of maintaining foreign exchange reserves and issue of optimum level of foreign exchange reserves.10 marks

Mentor’s comment- https://indianexpress.com/article/opinion/columns/forex-reserves-rising-indin-economy-gdp-covid-19-impact-6484029/ In the intro, briefly explain what foreign exchange reserve is. In the body,  as the utility of the foreign exchange reserves you can mention the purposes of maintaining them- Like import cover, stabilising rupee, to foster the confidence of investors etc. On maintaining the optimum level, you can mention the issue of … Continue reading India’s foreign exchange reserves touched new height recently. This also gives rise to the argument of lost opportunity. In light of this discuss the utility of maintaining foreign exchange reserves and issue of optimum level of foreign exchange reserves.10 marks