India becomes the country with the fourth largest foreign exchange reserves in the world, know which countries are ahead of us…

New Delhi. India's economy is making new records every day. There was a time when India's economy was considered one of the 'fragile five'. But now India has joined the category of world's largest foreign exchange reserves, which has secured fourth position globally after China, Japan and Switzerland.

India's foreign exchange reserves rose by USD 12.588 billion in a week to an all-time high of USD 704.885 billion in the week ended September 27, according to Reserve Bank of India data. However, foreign exchange figures have come down from last month's peak.

It is feared that the recent decline in reserves is due to RBI intervention to stop the sharp fall in the rupee. The high buffer of foreign exchange reserves helps protect domestic economic activity from global shocks. According to estimates, India's foreign exchange reserves are now enough to cover a year or more of projected imports.

The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions, with the aim of controlling excessive volatility in the exchange rate without reference to any pre-determined target level or band. It often intervenes in the market through liquidity management, including selling dollars, to prevent massive devaluation of the rupee.