Objectives of Sovereign Wealth Fund
Following are a few of the Sovereign Wealth Fund's (SWF) main goals:
- Defending and maintaining economic and financial stability in the face of excessive export volatility.
- To generate higher profits than the reserves of foreign currency.
- To aid the monetary authorities in getting rid of any extra liquidity.
- To boost saving for upcoming generations.
- Supplying money for a nation's social and economic growth.
- To offer the selected countries long-term sustainable capital growth.
The importance of SWFs
- Sovereign Wealth Funds (SWFs) were established to advance a nation's economy and populace.
- According to the nonprofit Sovereign Wealth Fund Institute, SWFs have a higher risk appetite than conventional foreign exchange reserves since they value returns over liquidity.
- SWFs were established to support governments during fiscal surpluses or low levels of external debt. Some nations that rely on exporting raw materials like oil, copper, or diamonds cannot keep this extra cash on hand for immediate consumption.
Does India have a sovereign wealth fund?
Indians have a sovereign wealth fund, no question. Its official name is the National Investment and Infrastructure Fund (NIIF). NIIF was in charge of around US$ 4.4 billion in assets as of September 2020. Sovereign wealth funds are the name for government-owned investment vehicles.