And you'll notice that many oil producing countries, like Saudi Arabia, also have a dollar peg. Saudi, for example, has FX reserves 30% greater than those of India, notwithstanding a GDP one quarter its size.
Beggar thy neighbor policies are employed far and wide, even if it's China who gets all the attention.
All of those excess reserves reflect loans to the country in which the currency is denominated, mostly the U.S. That serves to depress interest rates in the recipient country, discouraging savings and encouraging consumption. Decades of deliberate export focused economic growth policies by our trading partners have made the situation increasingly worse. We never cared because the world was loaning us cheap money to buy stuff with. That system is looking increasingly unstable.