Forex reserves plunge by $5.14 bn on decline in foreign currency assets

The continuing fall of the rupee has had its impact on foreign exchange reserves, which plunged by $5.143 billion to $394.465 billion during the week to October 12 on account of decline in foreign currency assets, according to the RBI data released Friday.

This is one of the steepest falls that forex kitty has seen in recent decades.

In the previous week, the reserves had declined by $915.8 million to $399.609 billion.

As the rupee has been plummeting, the RBI has sold over $40 billion of its reserves to prop it up since the beginning of the current financial year.

The rupee had lost more than 16 per cent since January and plunged to 74.43 last week to the dollar, making it the worst emerging market currency. Friday the rupee closed at 73.32 to the greenback.

In the reporting week, foreign currency assets, a major component of overall reserves, plunged by a whopping $5.232 billion to $369.999 billion, as per the RBI data.

Expressed in US dollar, foreign currency assets include the effect of appreciation or depreciation of the non-US currencies such as the euro, the pound and the yen held in the reserves.

Forex reserves had touched a record high of $426.028 billion in the week to April 13, 2018. Since then the forex kitty has been on slide and is now down by over $31 billion.

Gold reserves rose by $71.4 million to $20.522 billion in the reporting week, the data showed.

The special drawing rights with the International Monetary Fund (IMF) was up by $6.4 million to $1.472 billion.

The country's reserve position with the IMF also rose by $10.7 million to $2.471 billion, the apex bank said.