Forex Reserves Decline For Second Straight Week To $652.8 Billion

India's foreign exchange reserves continued to slide for the second consecutive week to $652.8 billion for the period ended Dec. 13, according to data from the Reserve Bank of India on Friday.

The country's forex kitty fell nearly $2 billion over the previous reporting week, the lowest since late June. In the previous reporting week, the reserves had dropped $3.2 billion to $654.86 billion.

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 dollar from its reserves when the local currency is under pressure to curb excessive volatility.

Foreign investors have pumped in Rs 1.72 lakh crore into the country's debt and equity markets so far this year, according to data from the National Securities Depository Ltd.

December has seen Rs 32,551 crore make its way into Indian bonds and equities, while in November, the FPIs pulled Rs 21,444 crore out of the Indian markets.

For the week ended Dec. 13, foreign currency assets—a major component of the reserves—fell to $562.5 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 to $68 billion during the week. Foreign exchange reserves have dropped by nearly $50 billion from its peak of $700 billion in the end of September.