Forex reserves fall to over three-month low of $560 bn

Foreign exchange reserves fell $2.4 billion to $560 billion for the week ended March 10, their lowest since early-December, the Reserve Bank of India’s (RBI) statistical supplement showed on Friday.

The forex reserves had risen $1.45 billion last week to $562.4 billion after declining continuously throughout the month of February.

As per RBI data, foreign currency assets, the largest component of foreign exchange reserves, fell by $2.22 billion during the period under review to $494.8 billion, while gold reserves fell $110 million to $41.92 billion. Further, the SDRs fell $53 million on week to $18.12 billion.

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“USD/INR spot closed 17 paise lower at 82.55, thanks to a risk-on rally in global markets after the rescue of First Republic bank in the US. Over the next week, the focus will be on the US Fed meeting, where they are expected to hike rates by 25 bps. As a result, we can expect high volatility in USD/INR. We expect a range of 82.10 and 82.90 on the spot,” said Anindya Banerjee, VP at Kotak Securities.