Finance
The Reserve Bank of India (RBI) reported that India’s foreign exchange reserves fell $7.5 billion to $572.7 billion during the week ended July 15. The reserves are now at a 20-month low, reaching $568 billion on November 6, 2020.
The drop in foreign exchange reserves last week was primarily due to a $6.5 billion drop in foreign currency assets, according to the data.
Reserves fell by about $60 billion in 2022, owing primarily to the central bank’s aggressive intervention to reduce the sharp volatility in the foreign exchange market. Since the outbreak of war in Europe in late February, the rupee has been under pressure. The Indian rupee has lost about 7% of its value against the US dollar in 2022.
Foreign exchange reserves have been depleted by around $70 billion since their peak in September 2021.
On Friday, RBI Governor Shaktikanta Das stated that the current level of foreign exchange reserves was adequate.
“…the Indian rupee is holding up well relative to both advanced and emerging market economies (EME) peers. This is because our underlying fundamentals are strong, resilient, and intact. The recovery is gradually strengthening. The current account deficit is modest. Inflation is stabilising. The financial sector is well-capitalised and sound. The external debt-to-GDP ratio is declining. The foreign exchange reserves are adequate,” Das said.
According to the July RBI bulletin, foreign exchange reserves of $ 580.3 billion on July 8, 2022, were equivalent to 9.5 months of projected imports for 2022-23.
Source:BS
