Forex reserves lowest since Oct 2020; likely to stay under pressure in near term
As per RBI's latest weekly bulletin, India's forex reserves declined by $6.687 billion to $564.053 billion in the week ending August 19, 2022, compared to the previous week. In the week ending August 12, the reserves contracted by $2.238 billion.
India's foreign exchange (forex) reserves dropped to their lowest level since October 2020, to $564 billion due to a sharp decline in foreign currency assets. All components under forex reserves witnessed a drop in the week ending August 19, 2022. Gold reserves dipped as well after two consecutive weekly rises. The country's forex reserves continue to be under pressure amidst the biggest buying from overseas investors in the Indian market. Forex reserves are likely to be vulnerable in the near term as the US dollar index is moving towards mid-July highs.