EconomyRBI
Forex reserves fall for a sixth week to $721 billion as RBI defends the rupee
India's foreign exchange reserves dropped by $5.01 billion in the week to 16 October, the Reserve Bank's data showed. They are now about $65 billion below the record set in early September.
Key points
- Reserves fell $5.011 billion to $721.016 billion in the week ended 16 October.
- Foreign currency assets dropped $5.758 billion, while gold holdings rose $706 million.
- Reserves have fallen every week since the $785.706 billion record of 4 September.
India’s foreign exchange reserves fell for a sixth straight week, dropping by $5.011 billion to $721.016 billion in the week ended 16 October, data released by the Reserve Bank of India on Friday showed.
The decline followed a fall of $8.578 billion the week before, which took reserves to $726.027 billion. They are now about $65 billion below the record $785.706 billion reached in the week ended 4 September, when a special concessional swap window for diaspora deposits brought banks nearly $133 billion.
Foreign currency assets, the biggest part of the reserves, fell $5.758 billion to $591.847 billion. These are held in several currencies, so their dollar value also moves with exchange rates.
The other parts rose. Gold holdings went up by $706 million to $105.8 billion, special drawing rights by $30 million to $18.578 billion, and India’s reserve position with the International Monetary Fund by $11 million to $4.791 billion.
Market experts tied the fall to the use of resources raised through FCNR(B) deposits and to the central bank selling dollars to support the rupee, which has been under pressure from crude oil above $110 a barrel and foreign investors pulling money out of Indian shares.
The rupee ended Friday 12 paise weaker at a provisional 94.93 to the dollar. The next reserves figure, for the week ended 23 October, is due on 30 October.