Forex reserves fell by $5.22 billion to $545.65 billion as of September 12, data from Reserve Bank of India (RBI) showed. While some part of the decrease could be due to valuation changes, currency experts said much of it would be due to the RBI intervening in the currency market to prevent the rupee from depreciating more sharply against dollar.
The central bank has been dipping into the reserves kitty to deploy dollars in the currency market, amid volatility caused by a strengthening dollar. Experts estimate the central bank has sold around $35 billion in the currency markets since April. On Thursday, the rupee closed below the 80 mark against the dollar.
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The fall in the reserves as of September 16 was due to a dip in the foreign currency assets (FCA), a major component of the overall reserves, according to the Weekly Statistical Supplement released by the RBI on Friday. The FCA fell by $4.698 billion to $ 484.901 billion, the apex bank said. Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the foreign exchange reserves.
The value of the gold reserves decreased by $458 million to $38.186 billion, data showed. Special Drawing Rights (SDRs) was lower by $32 million to $17.686 billion, the RBI said.
The country’s reserve position with the IMF was down by $31 million to $4.88 billion for the reporting week, data showed.