Foreign exchange reserves

Foreign currency assets held by a central bank, used to manage the exchange rate and to meet external obligations.

Reserves of $640 billion against monthly imports of $55 billion provide about 11.6 months of import cover.

The conventional adequacy tests are months of import cover and the ratio of reserves to short-term external debt, and India has generally held a comfortable buffer on both since the crisis that taught it to.

Reserves are the difference between a currency adjustment and a currency crisis.