India's forex reserves fall $2.3 billion to $700.23 billion, shows RBI data

Last week, India's forex kitty had declined by $396 million to $702.57 billion, data showed

India’s foreign exchange (forex) reserves fell by $2.3 billion to $700.23 billion in the week ended September 26, latest data from the Reserve Bank of India (RBI) released on Friday shows.

 

Last Friday, forex reserves had declined by $396 million to $702.57 billion.

 

This week's data shows that foreign currency assets, a major component of the reserves, decreased by $4.393 billion to $581.757 billion.

 

Foreign currency assets include foreign currencies, bonds, and securities held by a country’s central bank in currencies other than its own, such as the US dollar, euro, or yen. 

 

The Reserve Bank is also said to have intervened last week across certain categories to smooth volatility in the currency market. Additionally, the central bank did not buy any dollars all of July, the first time it has done so in 11 years.

 

Meanwhile, gold reserves increased by $2.238 billion to $95.017 billion during the week, the central bank said.

 

According to the World Gold Council (WGC), gold is an important component of central bank reserves given its safety, liquidity, and return characteristics – the three key investment objectives for central banks.

 

The Special Drawing Rights (SDRs) were down by $90 million to $18.789 billion, the data showed.

 

India’s reserve position with the International Monetary Fund was also down by $89 million to $4.673 billion in the reporting week, the central bank said.