Context: Trusting private parties with foreign exchange reserves is a risky path to pursue.
Background:
Anticipated benefits of holding forex reserves: As listed down by former RBI governor Y V Reddy in 2004 -
Issues with the management of forex reserves by private parties:
Conclusion: RBI calls the high level of our forex reserves ‘deceptive’. And there is enough reason to refrain from entrusting the management of forex reserves to private parties.