India’s foreign exchange reserves fell for the third straight week to hit an eleven-week low of $561.27 billion for the week ended February 17, the Reserve Bank of India’s (RBI) statistical supplement showed on Friday.
The decline in the reserves was primarily on account of foreign currency assets, which fell $4.5 billion to $496 billion. The RBI holds major currencies, including the pound-sterling, yen and euro in its reserves, which are expressed in dollar terms.
The value of gold reserves in US dollar terms also fell $1 billion to $42 billion. SDRs fell by $87 million to $18 billion, the RBI data showed.
On a year-on-year basis, reserves were down by $72 billion and $46 billion compared to March 31, 2022.
The change in forex reserves is caused due to RBI intervention in the currency market to prevent the volatility in the exchange rate or dollar movement against other currencies held as reserves.
In the previous week, the rupee fell 0.4% against the greenback, its fourth weekly decline in a row. The likelihood of sharp appreciation in the dollar remains low, economists have said.
The US Federal Reserve released the minutes to the FOMC meeting earlier this week. The minutes indicated that some members wanted to hike rates by 50 basis points (bps). The FOMC had raised its benchmark interest rate by 25 bps, to a target range of 4.50-4.75%.