Strong forex reserves to help India manage global shocks: D Subbarao

Former Reserve Bank of India (RBI) governor D Subbarao believes that strong foreign exchange reserves in India will not insulate it from any global shocks but will help manage them. Subbarao further stated that whenever monetary policy normalisation happens in advanced economies, which will lead to large capital outflows, the RBI can manage exchange rate volatility through intervention in the foreign exchange market. The central bank may not use any monetary policy instrument. As of 1 October 2021, India’s foreign exchange reserves stood at USD 637.4 billion.