There are costs involved in increasing the country's foreign exchange reserves as the interest rate earned on such foreign exchange is low, deputy governor of the Indian central bank, H.R. Khan, said on Monday.
"Foreign exchange reserves act as the first line of defence but acquisition of reserves has its own costs," Mr Khan said in a speech to students at a management school in Pune, close to the country's financial capital Mumbai.
India's foreign exchange reserves rose to a record high of $333.17 billion as on Feb. 13, compared with $330.21 billion a week earlier, data from the Reserve Bank of India showed on Friday.
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