India's Forex Reserves Record Sharp Drop For Third Consecutive Week By $2.03 Bn — Details Here

The foreign currency asset, which is the biggest component of the forex reserves, declined by $3.202 billion to $550.454 billion during the week ended March 25

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New Delhi: India’s foreign exchange (forex) reserves recorded a sharp drop of $2.03 billion for the third consecutive week in the week ended March 25 amid the Reserve Bank of India (RBI) intervention in the currency markets by selling off dollar to rein in the slide in rupee value amid the Russia-Ukraine conflict.

This is the third consecutive weekly fall in the country’s forex reserves. The forex reserves had slipped by $2.597 billion and $9.646 billion in the previous two weeks, respectively, according to the news agency ANI report.

Reason Behind The Drop In Forex Reserves

According to the RBI’s weekly statistical supplement, the country’s forex reserves dipped by $2.03 billion to $617.648 billion during the week ended March 25. The forex reserves have dipped by nearly $15 billion in the last three weeks.

The sharpest decline in nearly two years has happened in the week ended March 11 in which forex reserves have gone down by $9.646 billion.

The forex reserves have been affected majorly as a result of a sharp drop in foreign currency assets. The foreign currency asset, which is the biggest component of the forex reserves, declined by $3.202 billion to $550.454 billion during the week ended March 25.

The foreign currency assets had slumped by $11.108 billion in the week ended March 11 and again by $703 million in the week ended March 18.

The forex reserves decline has coincided with the week during which the rupee hit an all-time low. The Indian rupee plunged to a record low of 77.02 against a US dollar on March 7. For the week ended March 18, the forex reserves had dipped by $2.59 billion.

Measured in US dollar terms, the foreign currency assets comprise the effect of appreciation or depreciation of non-dollar currencies like the Euro, UK’s Pound Sterling, and Japanese Yen held in the foreign exchange reserves.