India's foreign exchange reserves fell for the tenth straight week, hitting a six-month low of $654.86 billion in the week ended Dec. 6, according to data published by the Reserve Bank of India on Friday. This was $3.2 billion lower from the previous week's tally of $658.1 billion.
In September this year, India's FX reserves rose to a record high of $704,885 billion, easing ever since amidst the RBI's intervention for the rupee. The central bank's intervention has helped ensure that the Indian rupee has remained among the least volatile of all emerging market currencies in 2024.
The Reserve Bank's exchange rate policy has remained consistent over the years, and it is market-determined, outgoing RBI Governor Shaktikanta Das had stated at the last monetary policy meet earlier this month.
Its central tenet is to maintain orderliness and stability, without compromising market efficiency, Das said, adding that foreign exchange reserves are deployed judiciously to mitigate undue volatility, maintain market confidence, anchor expectations and preserve overall financial stability.
These interventions focus on smoothening excessive and disruptive volatility rather than targeting any specific exchange rate level or band, said Das.
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