India’s forex reserves declined for the fourth week straight hitting a three-month low of $560.942 billion. All components in forex reserves have contracted in the week ending February 24.
As per RBI’s latest weekly statistical data, reserves dipped by $325 million to $560.942 billion in the week ending February 24, 2023. In the previous week, reserves had plunged by $5.681 billion.
So far, in four weeks, the country’s reserves have declined by around $15.83 billion.
During the latest week, foreign currency assets (FCA) which is the biggest component in forex reserves, contracted by $166 million to $495.906 billion. While gold reserves were down by $66 million to $41.751 billion.
Also, SDRs have tumbled by $80 million to $18.187 billion in the week ending February 24, while the reserve position in the IMF stood at $5.098 billion lower by $12 million in the week under review.
India’s reserves were at an all-time high of $645 billion in October 2021. However, to tame rupee depreciation, RBI has been intervening in the forex market via both spot and forward positions.
On Friday, the rupee closed at 81.9650 up by 0.77% driven by strong foreign funds flow in Adani firms, positive Asian peers, a slide down in the dollar, and strong buying in domestic equities.
For the week, the local unit has climbed by 0.77% — making it the best weekly upside since mid-January. It is said that RBI has most likely sold dollars through PSBs to curb depreciation in the rupee.
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