India’s forex reserves resume fall after brief respite

  • India's reserves were $532.28 billion at the end of the previous week

Livemint
Updated21 Oct 2022, 06:52 PM IST
India's foreign exchange reserves fell to $528.36 billion in the week through October 14.
India’s foreign exchange reserves fell to $528.36 billion in the week through October 14.

The country's foreign exchange reserves fell to $528.36 billion in the week through October 14, a drop of $4.5 billion over a week ago, the Reserve Bank of India's (RBI) weekly statistical supplement showed on Friday.

India's reserves were $532.28 billion at the end of the previous week. Reserves rose marginally during the week ended October 7, but had been falling consistently for the previous eight straight weeks and are near their lowest levels since July 2020.

In October last year, the country's forex kitty had reached an all-time high of $645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.

“There is no doubt that there has been a depletion as inflows have decreased and the trade deficit has increased. Nonetheless, India, in my opinion, has a reasonably large forex reserve to tide over the current situation of over-depletion of forex reserves,” said Deepak Singh, Chief Business Officer at Reliance Securities. 

Foreign Currency Assets (FCA), a major component of the overall reserves, saw a drop of $2.828 billion to $468.668 billion during the week to October 14, according to the Weekly Statistical Supplement released by the Reserve Bank of India (RBI) on Friday.

Expressed in dollar terms, the FCAs 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, whose value had risen by $1.35 billion in the previous reporting week, saw a decline of $1.502 billion in the value to $37.453 billion, it said.

The Special Drawing Rights (SDRs) were down by $149 million to $17.433 billion, the apex bank said.

The country's reserve position with the IMF were down by $23 million to $4.813 billion in the reporting week, the apex bank data showed.

Meanwhile, rupee pared its initial losses and settled 4 paise higher at 82.75 (provisional) against the US dollar today, tracking a positive trend in domestic equities.

At the interbank foreign exchange market, the local currency opened at 82.89 and witnessed a high of 82.59 and a low of 82.91.

It finally settled at 82.75 against the American currency, registering a rise of 4 paise over its previous close.

Singh added, "Due to our strength in microeconomic fundamentals, the rupee is holding up well in comparison to other currencies, providing great hope."

On Thursday, the rupee had rebounded from its lifetime low to close 21 paise higher at 82.79.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.47 per cent to 113.41.

Global oil benchmark Brent crude futures fell 0.11 per cent to USD 92.28 per barrel.

On the domestic equity market front, the 30-share BSE Sensex rose 104.25 points or 0.18 per cent to end at 59,307.15, while the broader NSE Nifty advanced 12.35 points or 0.07 per cent to 17,576.30.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets as they purchased shares worth 1,864.79 crore on Thursday, as per the exchange data.

 

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First Published:21 Oct 2022, 06:52 PM IST
HomeNewsIndiaIndia’s forex reserves resume fall after brief respite

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