India's foreign exchange reserves decline by $1.9 bn to almost 6 month low

The reserves stood at $655 billion in the week ended December 6, having declined by $3.2 billion during that week

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India’s foreign exchange reserves fell by $1.9 billion to $653 billion, around six months low, in the week ended December 13, latest data by the Reserve Bank of India showed. The reserves fell to their lowest since June 28.

 

The total reserves fell on the back of decline in foreign currency assets which fell by $3 billion during the week.

 

The reserves stood at $655 billion in the week ended December 6. It had declined by $3.2 billion during the week.

 

On the other hand, gold reserves increased by $1.1 billion in the previous week, data showed. Additionally, the special drawing rights (SDRs) were down $35 million to $17.997 billion.

 

India’s reserve position with the International Monetary Fund (IMF) was also down $27 million to $4.240 billion in the reporting week. 

 

The reserves had touched a record high in the week ending September 27, when they reached $705 billion.

 

In the current quarter, the reserves have declined by $52 billion so far due to revaluation effect and intervention by the RBI in the foreign exchange market via dollar sales as the rupee remains under pressure. The rupee breached the psychologically crucial 85 per dollar mark on Thursday. The local currency continues to trade with a depreciation bias as the dollar index continues to strengthen.

 

The RBI intervenes on both sides of the foreign exchange market to curb excess volatility in the exchange rate.

 

During the previous week, the local currency depreciated by 0.1 per cent.

 

In the current calendar year, it has depreciated by 2.13 per cent so far, whereas, in the current financial year it witnessed 1.90 per cent. In the current month the rupee has depreciated by 0.62 per cent.