India’s foreign exchange reserves dropped the most on record as the central bank’s support for the rupee weighed on the stockpile.
Reserves fell $18.34 billion to $747.56 billion in the week of Sept. 25, data released on Friday showed. This is the biggest fall in a week on record, according to data compiled by Bloomberg.
The central bank has sold dollars to shore up the rupee, while also conducting sell-buy swaps in the foreign-exchange market, depleting reserves. The swaps usually involve the RBI selling dollars to banks for rupees, and agreeing to buy the US currency back later. Gold prices also fell during the week, leading to some revaluation.
The rupee is among Asian underperformers this year as surging oil prices and foreign outflows from local markets weigh on the currency. The rupee fell by the most in over two months to 96.3212 a dollar on Thursday. Markets were closed on Friday for a local holiday.
