Forex Reserves Fall For Fifth Straight Week To Lowest In 10 Months

India's foreign exchange reserves fell for the fifth straight week to $634.59 billion for the week ended Jan. 3, the lowest since the week ended March 1, the Reserve Bank of India said on Friday.

The country's forex kitty fell $5.69 billion over the previous reporting week when it had dropped $4.11 billion to $640.28 billion, according to 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 Indian rupee weakened by 11 paise to close at an all-time low against the US dollar on Friday, just three paise away from hitting the 86 mark. The domestic currency closed at 85.97 against the greenback in comparison to a close of 85.86 a day ago, according to Bloomberg data.

"Indian rupee may not be able to sustain the gains with a stronger dollar index and rising oil prices," Anil Bhansali, executive director of Finrex Treasury Advisors LLP, said.

The Indian currency is expected to move in the broad range of 83.20–87.00 against the greenback in 2025.

January has seen Rs 36,575 crore make its way into Indian bonds and equities, according to data on NSDL.

For the week ended Jan. 3, foreign currency assets — a major component of the reserves — fell to $545.48 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 rose to $67.09 billion during the week.