New Delhi: India’s foreign exchange (forex) reserves declined by $8.31 billion to $566.94 billion for the week ended on February 10 in the biggest slump in over 11 months, according to the latest figures of the Reserve Bank of India (RBI).
The decline, which is equivalent to 8.31%, is likely a result of the central bank selling dollars to prevent the rupee from weakening past 83 against the US currency.
According to Reuters, the RBI has likely been selling dollars in the non-deliverable forward (NDF) market this week to prevent the rupee from sliding. In terms of week-on-week performance, reserves have plunged by at least 1.5%.
The Indian rupee has weakened against the US dollar for the fourth straight week, as it closed at 82.83 against the US dollar, February 17.
Prior to the week that ended on February 10, India’s foreign exchange reserves had dropped by $1.49 billion to reach $575.27 billion as of February 3, which brought to an end a hitherto three-week rising trend. The country’s forex reserves had reached an all-time high of USD 645 billion in October 2021.
This is the second consecutive week of fall in India’s forex reserves. During the week that ended on February 10, all components of the forex reserves declined.
The value of gold reserves declined by $919 million to $42.86 billion. Special Drawing Rights (SDRs) witnessed a dip by $190 million to $18.35 billion, and India’s reserve position with the International Monetary Fund (IMF) fell by $102 million to $5.14 billion during the week under review, according to Deccan Herald.
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