Finance
The Reserve Bank of India’s (RBI) foreign exchange reserves fell by $5.7 billion in the week ended February 17 to an 11-week low of $561.27 billion, according to the most recent central bank data.
The drop in reserves for the third week in a row was primarily due to a drop in the RBI’s foreign currency assets, which fell $4.5 billion to $496.07 billion the previous week.
According to the data, the RBI’s gold reserves fell $1 billion last week, to $41.82 billion.
In the week gone by, the rupee depreciated 0.4 per cent against the US dollar, settling at 82.83 per US dollar on February 17.
According to analysts, a portion of the decline in reserves last week could be attributed to the central bank’s likely dollar sales in order to prevent excessive volatility in the rupee.
Following sharp increases in November and December, the RBI’s reserves have been declining in recent weeks, owing largely to renewed concerns about Federal Reserve rate hikes and a consequent rise in the US dollar globally.
Reserves of $576.8 billion as of January 27 covered 9.4 months of projected imports for the current fiscal year, according to the RBI staff in the February Bulletin.
From June to October 2022, the RBI was a net seller of US dollars in the currency market as it sought to reduce excessive volatility in the rupee’s exchange rate amid the Ukraine war and aggressive Fed rate hikes. Since September end, foreign exchange reserves have increased by $28.9 billion to $561.6 billion as on January 6.
Source:BS
