India’s Forex Reserves Fall to 4-Month Low Amid Economic Challenges

India’s Forex Reserves Fall to 4-Month Low Amid Economic Challenges

Ira Singh
30 Sep’23

India’s foreign exchange (forex) reserves have declined for a third straight week and were at a four-month low of $590.70 billion as of Sept. 22, data from the Reserve Bank of India (RBI) showed on Friday.

That was a decrease of $2.3 billion from the previous week. Reserves had fallen by a total of $5.9 billion in the prior two weeks.

The central bank intervenes in the spot and forwards markets to prevent runaway moves in the rupee.

Over the last few trading sessions, the RBI has been likely selling dollars via public sector banks to prevent the rupee from falling to a record low against the dollar, traders said.
Apart from the central bank’s intervention, changes in foreign currency assets, expressed in dollar terms, include the effects of appreciation or depreciation of other currencies held in the RBI’s reserves.

Foreign exchange reserves include India’s Reserve Tranche position in the International Monetary Fund.For the week the forex reserves data pertains, the rupee had risen 0.2% against the dollar and traded in a range of 82.8225 and 83.2725.

The rupee ended at 83.04 on Friday, down 0.1% for the week.