India’s foreign exchange reserves fall by $2.39 billion to three-month low of $560.003 billion
Mumbai:
The country’s foreign exchange reserves fell by $2.39 billion to a three-month low of $560.003 billion in the week to March 10, the Reserve Bank said in its latest weekly data release.
Reserves rose $1.46 billion to $562.4 billion in the week ended March 3.
On an annualized basis, reserves fell by $47.31 billion in the week under review, while on a fiscal year basis they fell by $62.23 billion, the RBI said.
Due to the erosion, foreign exchange prices were at their lowest level since early December, according to the RBI’s weekly statistical supplement released on Friday.
The loss in reserves was due to the revaluation of foreign currency assets, which were revalued at $2.2 billion to $494.86 billion for the week ended March 10.
Compared with the same period of the previous year, the value of foreign currency assets decreased by 45.86 billion US dollars, and from the perspective of the fiscal year, it decreased by 59.49 billion US dollars.
Denominated in U.S. dollars, foreign currency assets include the impact of appreciation or depreciation of non-U.S. units such as the euro, pound sterling, and yen held in foreign exchange reserves.
The reserve loss was mainly due to the RBI selling dollars to curb rupee volatility in the spot and forward markets to prevent the exchange rate from getting out of control.
The rupee held its ground last week, losing just 10 basis points against the dollar, trading in a range of 81.61-82.29. The rupee closed at 82.55 on Friday.
The country’s gold reserves and SDR holdings also declined during the week under review, with reserves falling by $110 million and $53 million, respectively. Gold reserves and SDR holdings were $41.92 billion and $18.12 billion, respectively.
The country’s reserve position with the IMF also fell by $11 million to $5.1 billion.
Reserves have been falling from their peaks as the rupee has been under pressure and monetary authorities have been taking steps to shield the rupee from extreme volatility. The cost of defending the rupee’s depreciation exceeds $115 billion in reserves by 2022.
The biggest drop was in the week ended Feb. 10, when reserves plunged $8.32 billion to $566.95 billion.
In October 2021, Forex Kitty reached an all-time high of $645 billion.
(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)
