India’s forex reserves fell $14.9 billion in the week ended September 18, the sharpest weekly decline since November 2024, amid heavy RBI intervention
Brent crude prices have risen over 17% in a month. Higher oil prices increase India’s import bill and demand for foreign currency, putting further pressure on the rupee
Pressure on the rupee is coming from both sides: higher crude prices are widening current-account pressures, while foreign portfolio flows turned negative in September
The FCNR(B) swap scheme helped push reserves above $785 billion by September 4. Reserves have since fallen by about $20 billion as the rupee came under renewed pressure
The rupee has depreciated about 5.5% since the Iran war began. With oil prices higher and capital flows weaker, allowing an orderly adjustment can help the economy absorb the shock
Prolonged intervention could deplete reserves before the extent of the West Asia conflict is clear. A weaker rupee is also supporting exports, which rose 17.85% in April-August