India's Forex Reserves Fall To $691 Billion As RBI Goes Easy To Rebuild Buffer
The country's forex kitty shed $1.2 billion over the previous reporting week, according to RBI data.
India's foreign exchange reserves fell to $691.5 billion for the week that ended on May 30. The country's forex kitty shed $1.2 billion over the previous reporting week, according to data from the Reserve Bank of India on Friday.
In the previous reporting week, reserves had risen to $692.7 billion.
Foreign investors have pulled out over $10 billion from the country's debt and equity markets so far this year, according to data from the National Securities Depository Ltd.
For the week ended May 30, foreign currency assets—a major component of the reserves—fell $1.9 billion to $584 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 increased by $723 million to $84.3 billion during the week.
RBI Governor Sanjay Malhotra said on Friday that the central bank will not be "unduly bothered" about rebuilding forex reserves and will add to it "if there are opportunities".
Reserves have steadily recovered after a steep fall from their peak of $700 billion at the end of September.
He also said net FDI is important for building forex reserves and India continues to be an attractive investment destination. "The moderation in net inflows primarily on the back of repatriation. Gross FDI remains high," he said during a post-MPC media briefing.
India ranks as the fourth-largest holder of foreign exchange reserves, sufficient to cover nearly a year of imports. The country's forex holdings are the fourth largest, after China, Japan and Switzerland.
