Forex Reserves Fall For Fourth Straight Week To $640.28 Billion
The country's forex kitty fell by $4.11 billion over the previous reporting week.
India's foreign exchange reserves fell for the fourth straight week to $640.28 billion for the week ended Dec. 27, according to data from the Reserve Bank of India on Friday. This is the lowest level since April 19.
The country's forex kitty fell by $4.11 billion over the previous reporting week. In the week ended Dec. 20, the reserves had dropped by $8.48 billion to $644.39 billion.
The decline can be attributed to a robust central-bank intervention in the currency market to support the rupee amid a strong dollar. The RBI typically sells dollars from its reserves when the local currency is under pressure to curb excessive volatility.
The Indian rupee weakened by two paise to close at 85.78 against the US dollar, after opening five paise weaker at 85.80 against the greenback on Friday. This marked the ninth consecutive week of decline for the local currency. It had closed the preceding week, ended Dec. 27, at 85.75 against its American counterpart.
The Indian currency is expected to move in the broad range of 83.20–87.00 against the greenback in 2025.
Meanwhile, foreign portfolio investors made their way back into Indian bonds and equities by pumping Rs 29,240 crore, while in November, the FPIs pulled Rs 21,444 crore out of the Indian markets.
Through 2024, overseas investors have been net sellers and have collectively offloaded stocks worth Rs 7,292.3 crore, according to data from NSDL compiled by NDTV Profit.
For the week ended Dec. 27, foreign currency assets—a major component of the reserves—fell to $551.9 billion, according to the RBI data.
In dollar terms, foreign currency assets include the effect of the appreciation or depreciation of non-US units like the euro, pound, and yen held in foreign exchange reserves. Gold reserves decreased to $66.26 billion during the week.
