Quick Read
Summary is AI Generated. Newsroom Reviewed
-
India's forex reserves declined by $1.9 billion to $686.2 billion in the week ending Nov 28
-
Foreign currency assets dropped by $3.6 billion to $557 billion amid rupee depreciation
-
Gold reserves rose by $1.6 billion to $105.8 billion during the same period
India's foreign exchange reserves took another hit in the final week of November as a sharp depreciation in the rupee prompted the Reserve Bank of India to stabilise the currency market.
The forex kitty fell nearly $1.9 billion to $686.2 billion in the week ending Nov. 28, according to the RBI data released on Friday. In the previous reporting week,reserves depleted by $4.472 billion to $688.104 billion due to a steep decrease in the value of gold reserves.
For the week ended Nov. 28, foreign currency assets, a major component of the reserves, decreased by $3.6 billion to $557 billion, the data showed.
Expressed in dollar terms, the foreign currency assets include the effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.
The country's forex kitty, one of the largest in the world, can cover imports of over 11 months.
The value of the gold reserves rose by $1.6 billion to $105.8 billion during the week. The Special Drawing Rights (SDRs) also increased by $63 million to $18.6 billion. India's reserve position with the IMF was steady at $4.8 billion.
RBI Governor Sanjay Malhotra said India’s policy of managing the exchange rate’s volatility hasn’t changed, quashing speculation that it was allowing large swings by staying on the sidelines and letting the rupee drop to new lows this week.
“We don’t think there has been any conscious attempt to change our tolerance to volatility,” Malhotra said at a post-policy press conference after Reserve Bank of India cut interest rates by a 25 bps on Friday.
The rupee slide past the key 90-per-dollar mark to a new record low this week. In November, the unit lost 0.8% of its value against the dollar amid uncertainities around a US-India trade deal and persistent foreign portfolio outflows.
As per reports, many traders attributed the sharpness of the decline to the central bank’s less aggressive support for the local currency. The RBI had defended the record low touched in September for two months before allowing the rupee to test a series of fresh troughs recently, according to a Bloomberg News report.
RECOMMENDED FOR YOU
POPULAR