The country's foreign exchange (forex) reserves decreased by $1.318 billion to $593.749 billion for the week ending June 9, according to the Reserve Bank of India data published on Friday. In the previous reporting week, the overall reserves had increased by $5.93 billion to $595.067 billion.
According to the Weekly Statistical Supplement released by the RBI, for the week ended June 9, the foreign currency assets, a major component of the reserves, decreased by $1.128 billion to $525.073 billion.
These foreign currency assets are valued in dollars and take into account the impact of changes in value for currencies such as the euro, pound, and yen held in the foreign exchange reserves. Foreign Currency Assets (FCAs) are held in diverse currencies like the US dollar, Euro, pound sterling, Australian dollar, etc.
These foreign currency assets are valued in dollars and take into account the impact of changes in value for currencies such as the euro, pound, and yen held in the foreign exchange reserves. Foreign Currency Assets (FCAs) are held in diverse currencies like the US dollar, Euro, pound sterling, Australian dollar, etc.
During the reporting week, Gold reserves dropped by $183 million to $45.374 billion, as per RBI data. However, the Special Drawing Rights (SDRs) were up by $2 million to $18.187 billion.
The country's reserve position with the IMF declined by $8 million to $5.115 billion in the reporting week, the apex bank data showed.
Forex reserves are essential assets maintained in foreign currencies by the central bank. They frequently support the exchange rate and have an impact on monetary policy. The RBI intervenes in the spot and forwards markets to stop the rupee from making unpredictable movements that have an impact on the overall reserves position. Forex changes also occur from valuation gains or losses.
On Friday, the Rupee gained 31 paise to close at 81.94 per dollar against the previous close of 82.18.