Import cover falls to 10.8 months from 11.3

Import cover falls to 10.8 months from 11.3

The RBI does not give reasons behind the rise or fall in reserves.

India can import only for 10.8 months with the kind of foreign exchange reserves it has in its kitty, the latest official data showed on Friday, indicating a decline in import cover.

The Reserve Bank of India (RBI) data which comes after every six months showed that at the end of December 2017, the import cover decreased to 10.8 months from 11.3 months at March-end 2017.

The import cover of reserves is a traditional trade-based indicator of reserve adequacy. The import cover had declined to its lowest in September 2013 when India could import only for 6.6 months with its foreign exchange reserves. Since then it had increased steadily, barring a few hiccups.

The foreign exchange reserves, however, increased to $409.07 billion as of December-end 2017 from an earlier $399.23 billion.

India's latest foreign exchange reserves position indicates that reserves climbed up to $420.96 billion at the end of February 2018. The import cover for this period will be known only in January 2019.

The RBI does not give reasons behind the rise or fall in reserves.

The RBI's gold reserves increased to more than 560 tonnes at the end of March 2018.

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