India’s foreign exchange reserves have plunged by over $9.64 billion during the week that ended on March 11.
Accordingly, the Reserve Bank of India data showed that India’s forex reserves fell to $622.275 billion from $631.920 billion reported the previous week.
According to analysts, a likely intervention by the Reserve Bank of India to arrest the sharp fall in rupee value against the US dollar depleted the reserve.
The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.
According to reports, the latest decline in forex reserves is the steepest in nearly two years. The country’s forex reserves comprise foreign currency assets (FCAs), gold reserves, SDRs, and the country’s reserve position with the IMF.
On a weekly basis, FCAs, the largest component of the forex reserves, edged lower by $11.108 billion to $554.359 billion. However, the value of the country’s gold reserves increased by $1.522 billion to $43.842 billion. The SDR value fell by $53 million to $18.928 billion.
In addition, the country’s reserve position with the IMF slipped by $7 million to $5.146 billion.