New Delhi: India’s foreign exchange (forex) reserves declined by $325 million to settle at $560.94 billion for the week ended on February 24, according to the latest figures issued by the Reserve Bank of India.
This is the fourth consecutive weekly drop in forex reserves. In the week before, the overall reserves had declined by $5.68 billion to settle at $561.267 billion.
In October 2021, the forex kitty had reached an all-time high of $645 billion. The reserves have since been falling as the RBI deploys the reserves to defend the rupee amid pressures due to various factors, mainly global developments, the news agency PTI reported.
According to the Weekly Statistical Supplement of the RBI, foreign currency assets – a major component of the reserves – dipped by $166 million to settle at $495.906 billion.
Foreign currency assets include the effect of appreciation or depreciation of non-US units like the Euro, Pound and Yen held in the foreign exchange reserves. They are expressed in dollar terms.
The same declining trend was also noted in terms of gold reserves. The gold kitty declined again for the fourth consecutive week and dipped by $66 million to settle at $41.751.
The Special Drawing Rights (SDRs) also dipped $80 million to $18.187 billion. The country’s reserve position with the International Monetary Fund was down $12 million to $5.098 billion in the reporting week, the PTI report said citing RBI data.
Earlier, forex reserves had declined by $8.31 billion to $566.94 billion for the week ended on February 10 in the biggest slump in over 11 months. The decline, which was equivalent to 8.31%, was likely a result of the central bank selling dollars to prevent the rupee from weakening past 83 against the US currency. According to Reuters, the RBI had likely been selling dollars in the non-deliverable forward (NDF) market that week to prevent the rupee from sliding.
Prior to the week that ended on February 10, India’s foreign exchange reserves had dropped by $1.49 billion to reach $575.27 billion as of February 3, which brought to an end a hitherto three-week rising trend. The country’s forex reserves had reached an all-time high of USD 645 billion in October 2021.