Finance
India’s foreign exchange (forex) reserves declined for the second week in a row, to a near four-month low of $593.037 billion as of September 15, down $860 million from the previous week, according to Reserve Bank of India (RBI) data released on Friday, September 22. Overall reserves fell $4.99 billion to $593.90 billion in the preceding reporting week.
The central bank depleted the reserves using the funds to defend the rupee against pressures brought on mostly by global events since last year. To prevent the rupee from falling too much, the central bank intervenes in the spot and future markets.
According to dealers mentioned in a Reuters story, the RBI has likely been selling dollars through public sector banks in recent trading sessions to keep the rupee from falling to a record low. The country’s reserves reached an all-time high of $645 billion in October 2021.
According to the RBI’s Weekly Statistical Supplement for the week ending September 15, foreign currency assets, a major component of reserves, fell $511 million to $525.915 billion.
Foreign currency assets, expressed in dollars, comprise the effect of appreciation or depreciation of non-US units such as the euro, pound, and yen held in foreign exchange reserves. According to the report, gold reserves fell $384 million to $44 billion, said the RBI. The Special Drawing Rights (SDRs) were up $32 million to $18.092 billion, said the central bank.
The Reserve Tranche position of India in the International Monetary Fund (IMF) is included in its foreign exchange reserves. In the reporting week, the country’s reserve position with the IMF fell by $4 million to $5.03 billion.
The rupee fell little versus the US dollar during the week covered by the forex reserves data, trading in a range of 82.8225 to 83.1850. The rupee closed the day at 82.93, snapping a three-week losing skid.
The US dollar index rose to 105.74, its highest level in more than six months, while the US 10-year Treasury yield rose to 4.50 percent, its highest level since 2007, on hopes that the US Federal Reserve will keep interest rates higher for longer.
