India becomes 5th largest holder of forex reserves

India on Friday joined the elite group of world's five biggest holders of foreign exchange reserves as it added about $4.5 billion last week to take the kitty to $261 billion.

The country surpassed South Korea, which had $257 billion in forex reserves as of September-end, to stand at the fifth spot. While India reports its reserve position every week, South Korea does so on a monthly basis.

China leads the pack with $1,434 billion, followed by Japan ($946 billion), Russia ($440 billion) and Taiwan ($263 billion). According to Reserve Bank's weekly bulletin released today, India's foreign exchange reserves increased by about $4.5 billion during the week ended October 19.

The rate at which the country's foreign exchange kitty is growing, especially after the US housing mortgage crisis, the country will soon overtake Taiwan. Among the BRIC (Brazil, Russia, India and China) countries, Brazil has the lowest foreign exchange reserves of $164 billion, according to the latest IMF data. The other major holders of foreign exchange reserves in the world include Singapore ($152 billion), Hong Kong ($141 billion) and Germany ($126 billion).

Total foreign currency reserves of the members of the Eurosystem, including countries which have adopted Euro as their currency, have been estimated at $453 billion. India's foreign exchange reserves have continued to grow at a rapid pace despite the efforts of the government and the Reserve Bank of India (RBI) to moderate inflows and encourage outflows through various policy initiatives.