RBI Reports Significant Drop in Forex Reserves Amidst Rupee Challenges
RBI's Forex Reserves Decline: Key Insights
MUMBAI: India's foreign exchange reserves have seen a substantial decline, marking the first drop in eight weeks. The reserves fell by $3.7 billion to $701.2 billion in the week ended Oct 4, according to RBI data. Despite this decline, reserves still exceed the important $700 billion threshold.
Context of the Decline
The fall in forex reserves comes after they reached a record high of $704.9 billion in the week ending Sept 27. Before this dip, there was an impressive build-up of nearly $35 billion over the previous seven weeks. Foreign currency reserves specifically accounted for a $3.5 billion drop, with gold reserves also declining by $40 million to around $66.8 billion.
Impact on the Rupee
The rupee has exhibited notable weakness, hitting its worst performance since May at 83.7 against the dollar. In the week ended Oct 4, the rupee declined by nearly 30 paise, further complicating the RBI’s efforts to stabilize it.
Factors Influencing Forex Reserves
- RBI's interventions in the forex market are pivotal.
- Fluctuations in foreign asset values impact reserves significantly.
- Gold and non-dollar currencies contribute to the overall valuation.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.