India Needs $1 Trillion Forex Reserves to Stabilize Rupee: Ex-RBI Deputy Governor

• Former RBI Deputy Governor Michael Debabrata Patra suggests India needs $1 trillion in forex reserves to shield the rupee from external shocks.
• Patra argues for a significant increase from current levels to safeguard against short-term debt and potential foreign portfolio investment outflows.
• The proposed $1 trillion reserve would cover 60-65% of foreign portfolio investment and deter speculative attacks on the rupee.
• He also recommends leveraging global dollar liquidity tools like the Federal Reserve's FIMA repo facility for short-term dollar injections.
• Recommendations come amid global financial landscape shifts and geopolitical tensions, particularly in West Asia, impacting India's external position.