India’s forex reserves records 4th straight week of decline, drops by $3.7 billion to $586.9 billion: RBI Data

India’s foreign exchange (forex) reserves dropped further by $3.794 billion to $586.908 billion for the week ended September 29, showed Reserve Bank of India (RBI) data on Friday, October 6. 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.

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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.

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 forex reserves. Gold reserves were down by $576 million to $43.731 billion, according to RBI data.

Also Read: Rupee ends flat at 83.25 against the US dollar after RBI policy; posts second weekly loss in a row

Forex reserves include India’s Reserve Tranche position in the International Monetary Fund (IMF). The Special Drawing Rights (SDRs) were down by $74 million to $17.939 billion, according to RBI. 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.

For the week the forex reserves data pertains, the rupee had fallen 0.1 per cent against the dollar and traded in a range of 83.0225 and 83.2450. The rupee ended at 83.2450 on Friday, down 0.2 per cent for the week. The rupee traded in a narrow range after the Reserve Bank of India’s monetary policy decision failed to provide any fresh cues to the currency, said analysts.