Forex Reserves Fall For Seventh Straight Week To Nearly 11-Month Low
The decline can be attributed to robust central bank intervention in the currency market to support the rupee amid a strong dollar.
India's foreign exchange reserves fell for the seventh straight week to $623.98 billion for the week ended Jan. 17, lowest since Feb. 23, 2024, as per the data released by the Reserve Bank of India on Friday.
The country's forex kitty fell $1.89 billion over the previous reporting week when it had dropped to a 10-month low of $625.87 billion, according to the data.
The decline can be attributed to 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 rupee closed stronger against the US dollar on Friday. It strengthened by 26 paise to close at 86.21 against the greenback. The domestic currency opened strong against the US dollar, buoyed by a decline in both the dollar index and crude oil prices. The domestic currency appreciated by 18 paise to open at 86.28 against the dollar, after closing at 86.46 on the previous day, as per Bloomberg data.
The dollar index, which measures the greenback’s performance against six major currencies, dropped by 0.53% to 107.474.
For the week ended Jan. 17, foreign currency assets — a major component of the reserves — fell to $533.1 billion, according to the RBI data. In comparison, it stood at $536 billion at the end of the preceding week.
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.
Meanwhile, gold reserves increased to $68.94 billion from $67.88 billion in the week ended Jan. 10, the RBI data showed.
