Forex reserve falls by $2.8 billion on weak rupee

Written by fe Bureau | Mumbai | Updated: Jun 29 2013, 05:49am hrs
Foreign exchange reserves fell by $2.8 billion last week indicating that the Reserve Bank of India had sold dollars to prevent the rupee from depreciating sharply.

This is the biggest weekly fall in reserves in over a month. Reserves as on June 21 stood at $287.8 billion, down $4 billion since April, RBI data showed.

Rupee touched a fresh all-time low of 60.71/$ on Wednesday after steadily falling 12% over the last two months. It recovered to 59.39/$ on Friday after CAD showed a moderation to 3.6% of GDP in the fourth quarter from the historic high of 6.7% of GDP in the third quarter.

Hamstrung by low reserves, RBI has refrained from heavy intervention the foreign exchange market. According to dealers, the central banks interventions in the foreign exchange market have been sporadic and not enough to prevent a sharp fall of the rupee.

Details of RBIs dollar purchases or sales for June will be available only two months down the line.

RBIs gold reserves too have fallen by $2.9 billion since April, largely due to valuation effect as global gold prices had plunged during that month.