India’s forex reserves dropped by $30 million to $594.858 billion for the week ended August 25, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped by $7.273 billion to $594.888 billion.
It can be noted that in October 2021, the country’s forex kitty had reached an all-time high of $645 billion. The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global developments since last year.
For the week ended August 25, the foreign currency assets, a major component of the reserves, decreased by $538 million to $527.249 billion, according to the Weekly Statistical Supplement released by the RBI.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves were up by $530 million to $44.354 billion, the RBI said. The apex bank said that the Special Drawing Rights (SDRs) were down by $11 million to $18.194 billion.
The country’s reserve position with the IMF was also down by $12 million to $5.061 billion in the reporting week, the apex bank data showed.
On Friday, the rupee recovered 8 paise to close at 82.62 against the US dollar on Friday due to forex inflows and strong macro data.
Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP, said, “The rupee had a roller coaster ride during the week as it opened higher and closed lower on a daily basis. Main buying of $ was by oil companies for month end and due to oil prices moving up as also by the Government for paying debt which was due.”
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