Coronavirus effect: India’s forex reserves fall by a whopping $12 billion

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Published: March 27, 2020 8:53:58 PM

The rupee hit an all-time low of Rs 76.15 against the US dollar on March 23 as foreign investors continued to withdraw money from domestic equity and debt market amid uncertainties due to the fast-spreading coronavirus.

rupee, forex, inr vs usd, investors, traders, hedge fundsThe reserves had touched a life-time high of USD 487.23 billion in the week to March 6, after it rose by USD 5.69 billion.

The country’s foreign exchange reserves fell by a whopping USD 11.98 billion to USD 469.909 billion in the week to March 20 as the Reserve Bank continued to supply dollars into the market to stem fall in the rupee. The rupee hit an all-time low of Rs 76.15 against the US dollar on March 23 as foreign investors continued to withdraw money from domestic equity and debt market amid uncertainties due to the fast-spreading coronavirus.

In the previous week, the country’s foreign exchange reserves fell by USD 5.346 billion to USD 481.89 billion. This was the first decline in the country’s reserve in almost six months. The reserves had touched a life-time high of USD 487.23 billion in the week to March 6, after it rose by USD 5.69 billion.

During the week to March 20, the foreign currency assets (FCA), a major component of the overall reserves, declined by USD 10.256 billion to USD 437.102 billion. 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.

The gold reserve, which was rising for the past many weeks, decreased by USD 1.610 billion to USD 27.856 billion in the week under review, the RBI data showed. The special drawing rights with the International Monetary Fund (IMF) were down by USD 40 million to USD 1.409 billion. The country’s reserve position with the IMF dipped by USD 77 million to USD 3.542 billion, the data showed.

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