Forex reserves decline for second week straight, now at $589.14 billion
India's forex reserves fell for the second week in a row, dropping by $4.339bn in the week ending May 26. By the end of the week, the country's forex reserves stood at $589.138bn.
PremiumIndia's forex reserves declined for second week straight, as per RBI's latest data. In the week that ended on May 26th, the country's reserves plunged by $4.339 billion. All components in reserves witnessed a fall in the week under review with foreign currency assets dragging the most.
The latest weekly data from RBI showed that forex reserves dipped by $4.339 billion to $589.138 billion in the week that ended on May 26, 2023. Prior to this week, the decline was around $6.052 billion.
The biggest spoilsport would be foreign currency assets (FCA) which is the largest component of reserves. FCA dipped by $4.014 billion to $520.931 billion during the May 26th week. In the previous week, FCA fell by $4.654 billion.
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Furthermore, in the week that ended on May 26th, gold reserves declined by $225 million on a week-on-week basis to $44.902 billion. Also, SDRs contracted by $84 million to $18.192 billion. While the reserve position at IMF dropped by $17 million to $5.113 billion.
India's forex reserves were at an all-time high of $645 billion in October 2021. Meanwhile, India’s foreign exchange reserves were placed at $ 578.4 billion as on March 31, 2023.
To cushion rupee depreciation, RBI has been intervening in the forex market via both spot and forward positions.
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In the week from May 29th to June 2nd, the Indian rupee witnessed its best week in five due to a weakening in the US dollar as anticipation for a rate pause heightened from US Federal Reserve in June policy. Overall, this week, the rupee appreciated by 0.32%.
At the interbank forex market, on Friday, the rupee closed at 82.3050 per dollar, after reaching to the highest level since May 17 at 82.28 per dollar.
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