Forex Reserves Fall For Sixth Straight Week To $625.87 Billion, Remain At 10-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 sixth straight week to $625.87 billion for the week ended Jan. 10, as per the data released by the Reserve Bank of India on Friday.
The country's forex kitty fell $8.7 billion over the previous reporting week when it had dropped to a 10-month low of $634.59 billion, according to the data.
The latest data released by the RBI shows that the forex reserves are still at a 10-month low.
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 weaker against the US currency for the second day in a row on Friday as the dollar index rebounded. The Indian unit settled six paise lower at 86.61 against the greenback, after opening flat at 84.56, according to Bloomberg data.
For the week ended Jan. 10, foreign currency assets — a major component of the reserves — fell to $536.01 billion, according to the RBI data. In comparison, it stood at $545.48 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 $67.88 billion from $67.09 billion in the week ended Jan. 3, the RBI data showed.
