Kapur, Devesh creator Patel, Urjit R. text xu| 2003 continuing ng p.1047-053. This paper, while attempting to explain India's decision to accumulate high foreign currency reserves, also analyses the resulting political-economy consequences. It is argued that the reserves are both a form of insurance against adverse external shocks as well as compensation for the inability to address long-standing domestic economic problems, a relatively unexplored theme. - Reproduced. Currencies Foreign exchange Economic and Political Weekly 180718