Forex reserves of a country are the reserve of currencies of different countries that it trades with. It is seen that gold reserves helps the country in times of financial crisis. It is not wrong to state that forex reserves also help the country in regaining its financial position in times of crisis and instability.  Te government manipulates the exchange rates. This is a way to bring stability to foreign rates and this in turn favors economic growth. If a country’s foreign reserve increases, it sees better economic and financial growth. If there are any attacks on the domestic currency, it can defend itself with the help of its foreign reserves.