Globalization: its impact on the composition and growth of India's foreign exchange reserves with special reference to capital inflows and outflows, full-convertibility and optimum level of foreign exchange

Apart from highlighting the historical and theoretical aspects of foreign exchange rate, the study aims to analyze the composition of India's foreign exchange reserves during the period between 1991 and 2009 and the issues related to optimum level of holding of foreign exchange reserves, full capital account convertibility, flow of capital and interest rate have also been critically analyzed. The study shows that the exposition of Indian economy in 1991 to global has much perceived effect on accumulation of foreign exchange reserves but India, at present, can not move on to full capital account convertibility due to fiscal deficit, inflationary trends and lack of very sound global level financial centre. The study reveals that India has presently obtained more than optimum level of foreign exchange reserves and Indian interest rates and investment climate were conducive to foreign exchange inflows which accrued mostly from capital accounts to various sectors of Indian economy during period under study.