Foreign exchange reserves fell $3.2 billion to $603.9 billion in the week ended July 28, latest data from the Reserve Bank of India (RBI) showed. Reserves have fallen for the second straight week after hitting their highest in over a year in the week ended July 14.
RBI intervenes in the foreign exchange market by purchasing or selling dollars in a bid to prevent excess volatility in the rupee. Foreign currency assets fell $2.5 billion to $535.3 billion. Gold reserves fell $710 million to nearly $45 billion.
Special drawing rights fell $29 million to $18.4 billion. Reserve position in the international monetary fund fell $11 million to $5.2 billion in the week ended July 28.
Rupee declined 0.36% to 82.26 in the week ended 28 July 2023. It fell by 0.13% to 82.84 on Friday. “Positive data on US jobless claims and non-manufacturing prices supported the dollar, giving the Federal Reserve room to consider higher interest rates. The recent rise in crude oil prices added pressure on the rupee,” Jateen Trivedi, VP research analyst, LKP Securities said.
“Looking ahead, the rupee may see higher positive levels in the range of 82.50 to 83.15 against the dollar,” he added.