Forex Update: India's Foreign Exchange Reserves Drop To 11-Week Low Of $593.9 Billion, Check Details

India’s forex reserves dropped by $4.992 billion to $593.904 billion for the week ended September 8, according to the latest RBI data. In the previous reporting week, the kitty had jumped $4.039 billion to $598.897 billion.

The country’s forex kitty had reached an all-time high of $645 billion in October 2021. The reserves took a hit as the central bank deployed the reserves to defend the rupee amid pressures caused majorly by global developments since last year.

For the week ended September 8, the foreign currency assets, a major component of the reserves, decreased by $4.265 billion to $526.426 billion, according to the Weekly Statistical Supplement released by the RBI.

Expressed in dollar terms, the 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.

Gold reserves were down by $554 million to $44.384 billion, the RBI said. The special drawing rights were down by $134 million to $18.06 billion, the apex bank said.

The country’s reserve position with the IMF was also down by $39 million to $5.034 billion in the reporting week, the apex bank data showed.

On Friday, The rupee fell 13 paise to settle at 83.16 against the US dollar on Friday, dragged down by rising crude oil prices and a strong greenback against major rivals overseas

“The rupee moved in a range of 38 paise during the week as FPIs and oil companies were the buyers of the dollar. FPIs were sellers in equities due to high valuations. The oil prices rose by $4.5 per barrel during the week thus prompting oil companies to buy dollars. The RBI was the supplier of dollars apart from some IPO in flows, FTSE rebalancing in flows thus keeping the rupee in the small range during the week,” Anil Kumar Bhansali, head of (treasury) and executive director of Finrex Treasury Advisors LLP, said.

He added that as the trade data was released in the last ten minutes rupee fell by 20 paise with trade deficit coming at $24.16 billion as against expectations of $21 billion and July figure of $20.67 billion.