India’s foreign exchange reserves fell by $9.64 billion, the most in two years
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India’s foreign exchange (forex) reserves fell $9.646 billion to $622.275 billion in the week ending March 11, the largest drop in over two years, as the Reserve Bank of India (RBI) sold dollars in large quantities to prevent the rupee’s value from falling further.
Foreign currency assets, the largest component of FX reserves, fell by $11.108 billion to $554.359 billion during the week under review, according to the RBI’s weekly statistics supplement.
When represented in US dollar terms, the effect of appreciation or depreciation of non-dollar currencies held in foreign exchange reserves, such as the Euro, British Pound Sterling, and Japanese Yen, is included in the foreign currency assets.
Following the rupee’s all-time low last week, the country’s foreign currency assets have plummeted.
The Indian rupee fell to a record low of 77.02 versus the US dollar on March 7.
According to market observers, the RBI engaged in the currency markets by selling dollars. During the week, the central bank is thought to have sold $1 billion worth of cash to prevent further depreciation in the Indian rupee.
The loss in foreign reserves in the week ending March 11 was the largest in almost two years. The country’s foreign exchange reserves declined by $11.9 billion in the week ending March 20, 2020. The country’s currency reserves hit an all-time high of $642.45 billion in the week ending September 3, 2021.
The value of India’s SDRs with the International Monetary Fund (IMF) fell by $53 million to $18.928 billion. According to RBI data, India’s reserve position at the IMF fell by $7 million to $5.146 billion in the week ending March 11.
The value of gold reserves, on the other hand, soared in tandem with the week’s significant rise in gold prices. During the week under review, gold reserves increased by $1.522 billion to $43.842 billion.
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