India’s forex reserves hits 11-week low; declines $4.9 billion to $593.90 billion: RBI Data

India's foreign exchange (forex) reserves fell to an 11-week low of $593.90 billion as of September 8 - a decrease of $5 billion from the previous week, Reserve Bank of India's (RBI) data showed on Friday, September 15. Forex reserves had risen by $4 billion in the week to September 1. In the previous reporting week, the kitty had jumped $4.039 billion to $598.897 billion.

The country's forex kitty had reached an all-time high of $645 billion in October 2021. The reserves took a hit as the central bank deployed the reserves to defend the rupee amid pressures caused majorly by global developments since last year, according to news agency Reuters.

For the week ended September 8, the foreign currency assets, a major component of the reserves, decreased by $4.265 billion to $526.426 billion, according to the Weekly Statistical Supplement released by the RBI.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves were down by $554 million to $44.384 billion, the RBI said. The special drawing rights were down by $134 million to $18.06 billion, the central bank said. The country's reserve position with the IMF was also down by $39 million to $5.034 billion in the reporting week, according to RBI data.

The central bank intervenes in the spot and forwards markets to prevent runaway moves in the rupee. The changes in foreign currency assets, expressed in dollar terms, include the effects of appreciation or depreciation of other currencies held in the RBI's reserves. 

Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund. For the week the forex reserves data pertains, the rupee had fallen to a near record low of 83.2175, prompting intervention from the RBI. The rupee ended at 83.1850 on Friday, down 0.2 per cent this week.

On Friday, the rupee fell 12 paise to settle at 83.15 (provisional) against the US dollar, dragged down by rising crude oil prices and a strong greenback against major rivals overseas. However, a positive trend in domestic markets restricted the downside for the local unit, said forex traders.

At the interbank foreign exchange market, the local unit opened at 83.02 against the US dollar and moved in a range of 82.98 and 83.20. The rupee finally settled at 83.15 (provisional) against the US dollar, down 12 paise from its previous close.