MUMBAI: India’s foreign exchange reserves extended their losing streak for a sixth straight week and stood at a 10-month low of $625.87 billion as of Jan. 10, data from the Reserve Bank of India showed on Friday.
The reserves declined by $8.72 billion in the reported week, the most in two months.
They have fallen by a cumulative $23.5 billion in the prior five weeks, and are down by $79 billion from their all-time high of $704.89 billion hit in late September.
Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.
The currency has faced persistent headwinds over recent weeks from a surging U.S. dollar and weak capital flows.
India’s FX reserves slump to 10-month low as rupee pressure mounts
The central bank’s routine interventions via state-run banks have, however, helped limit the rupee’s losses.
The RBI will be more judicious in its use of foreign exchange reserves to mitigate domestic currency market volatility amid strong global headwinds, Reuters reported this week.
In the week of Jan. 10, the rupee had hit its then record low of 85.97 and logged its tenth consecutive weekly loss.
The currency settled at 86.61 to the dollar on Friday, and fell 0.6% this week, its steepest weekly decline in 18 months.
The forex reserves also include India’s reserve tranche position in the International Monetary Fund.
Foreign exchange reserves (in million US dollars)
--------------------------------------------------
Jan 10 Jan 03
2025 2025
--------------------------------------------------
Foreign currency assets 536,011 545,480
Gold 67,883 67,092
SDRs 17,781 17,815
Reserve Tranche Position 4,195 4,199
--------------------------------------------------
Total 625,871 634,585
--------------------------------------------------
Comments
Comments are closed for this article.