Forex Reserves Hit Two-Year Low As Rupee Continues To Decline Against Dollar

India's foreign exchange reserves fell to a two-year low during the week that ended on October 14. Reserves were at $528.367 billion with a drop of $4.5 billion from the previous week.

New Delhi: India's foreign exchange reserves fell to a two-year low during the week that ended on October 14. India’s foreign exchange reserves were at $528.367 billion with a drop of $4.5 billion from the previous week, RBI data showed. In the preceding week, the country's foreign exchange reserves were at USD 532.868 billion. According to RBI's data, India's foreign currency assets, which are the biggest component of the forex reserves, declined by $2.828 billion to $468.668 billion during the week.

During the week, the value of gold reserves dropped by $1.5 billion to $37.453 billion. At the same time, the value of India's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined to 17.433 billion, a drop of  $149 million, the RBI data showed, as reported by news agency ANI.

India’s foreign exchange reserves have been falling for months now because of RBI's likely intervention in the market to defend the depreciating rupee against a surging US dollar, reported ANI.

On Wednesday, the rupee breached the 83 mark for the first time in its history. The market data showed that the rupee has depreciated around 11-12 per cent this year so far.

Over the past few weeks, Indian rupee has been weakening to hit fresh new all-time lows as the US dollar strengthened against major global currencies.

Typically, the RBI intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee, the ANI report said.

India's forex reserves have declined by around $100 billion ever since Russia invaded Ukraine in late February when imports of energy and other commodities got costlier globally.

(With Agency Inputs)