Depleting forex reserves making India vulnerable? Not really, say experts

At the current rate, the reserves may provide cover for eight months of imports in FY23. Four months could be considered a danger mark

A debate has been going on over the depletion of foreign exchange (forex) reserves. While many have cautioned against reducing reserves, the finance ministry had said the concerns are "overblown."

To test which side is correct, let us assess the economy's vulnerability due to depleting forex reserves. A Reuters poll on Monday said that its median results showed that forex could fall to $ 523 billion at the end of the current financial year.

If this happens, the reserves would be the lowest in three years. However, the more significant issue is the reserves would provide cover for imports for