Forex Update: India's Foreign Exchange Reserves Fall To 5-Month Low Of $586.9 Billion, Check Details

Falling for the fourth straight week, India’s forex reserves dropped further by $3.794 billion to over 5-month low of $586.908 billion for the week ended September 29, according to the latest RBI data. In the previous reporting week, the overall reserves had declined by $2.335 billion to $590.702 billion as of September 22.

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

For the week ended September 29, the foreign currency assets, a major component of the reserves, decreased by $3.127 billion to $520.236 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 $576 million to $43.731 billion, the RBI said. The special drawing rights (SDRs) were down by $74 million to $17.939 billion, the apex bank said.

The country’s reserve position with the IMF was also down by $18 million to $5.002 billion in the reporting week, the central bank data showed.

The central bank intervenes in the spot and forwards markets to prevent runaway moves in the rupee.

India’s forex reserves are “sizeable” and “very comfortable,” RBI Governor Shaktikanta Das said on Friday, while reiterating that the central bank’s intervention aims to prevent any volatility of the rupee’s exchange rate.

Apart from the central bank’s intervention, changes in foreign currency assets, expressed in dollar terms, include the effects of appreciation or depreciation of other currencies held in the RBI’s reserves.

(With Inputs From Agencies)