Mumbai: India's management of foreign exchange reserves has "generally been in accordance with International Monetary Fund (IMF) guidelines and comparable to global best practices," according to an IMF document.

In line with global developments, in the recent period, the country's reserve management operations have become more transparent, IMF said in its accompanying document published as a supplement to "Guidelines for Foreign Exchange Reserve Management".

The emphasis is on efficient management of reserves and India's policies like efficient use of technology, sound management of market risks, sophisticated risk management techniques and determination of optimal currency composition are comparable with international best practices, it said.

As on May 17, 2003, India's foreign exchange reserves have reached a record level of $ 79,225 million.

IMF said, "Maintaining a capacity to intervene in markets to support the exchange rate regime or to contain excessive volatility in foreign exchange market as also to provide confidence to markets and reduce their vulnerability to financial crises," are some of India's important reserve management objectives.

Reserve Bank of India in a release said the document also observes that "India intervenes in market to even out lumpy demand or supply in thin markets and to prevent destabilising speculation while facilitating forex transactions at market rates for all permissible purposes. Liquidity is, therefore, an important consideration is reserve management."

PTI