Improved forex reserve provided policymakers room for manoeuvre: BIS report

India's improved forex reserve adequacy helped maintain investor confidence and improved policymakers' room for manoeuvre, said a report prepared by Bank for International Settlements (BIS). India maintained forex reserve upwards of USD 550 billion during most of 2022. BIS is an international financial institution which is owned by member central banks with primary goal to foster international monetary and financial cooperation. "Several members noted that the development of deeper and more liquid FX markets in the past facilitated efficient price discovery during 2022 and reduced the need for FX interventions or capital flow measures (CFMs) (including China, Indonesia and Malaysia)," the report said. In addition, minimum hedging requirements on corporates' net liability exposure in the past helped build firms' resilience and also mitigated the need for (or intensity of) an ex-post policy response in 2022, the report titled 'Inflation, external financial conditions and macro-financ

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