India’s foreign exchange reserves during the week that ended on October 14 fell to an over two-year low of USD 528.367 billion, a drop of USD 4.5 billion from the previous week.
In the preceding week, the country’s foreign exchange reserves were at USD 532.868 billion, RBI data showed. According to RBI’s data, India’s foreign currency assets, which are the biggest component of the forex reserves, declined by USD 2.828 billion to USD 468.668 billion during the week.
The value of gold reserves dropped by USD 1.5 billion to USD 37.453 billion during the week.
The value of India’s Special Drawing Rights (SDRs) with the International Monetary Fund declined by USD 149 million to USD 17.433 billion during the week under review, the RBI data showed.
The reserves have been falling for months now because of RBI’s likely intervention in the market to defend the depreciating rupee against a surging US dollar.
For the record, the Indian rupee has been weakening over the past few weeks to hit fresh new all-time lows as the US dollar strengthened against major global currencies.
On Wednesday, the rupee breached the 83 mark for the first time in its history.
So far this year, the rupee has depreciated around 11-12 per cent, market data showed.
Typically, the RBI intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
India’s forex reserves have declined by around USD 100 billion ever since Russia invaded Ukraine in late February when imports of energy and other commodities got costlier globally.