After seeing the biggest jump in over a year in the past week, forex reserves of india Gold reserves declined by $1.09 billion to $529.99 billion for the week ended November 4 due to a sharp fall in gold reserves. In the previous week ending October 28, reserves rose by $6.56 billion to $531.08 billion, making it the biggest weekly jump in a year.
In October 2021, the country’s foreign exchange kitty reached an all-time high of $645 billion. Reserves are falling as the central bank deploys kitty to protect the rupee amid pressure on account of global growth.
Foreign currency assets (FCAs), a major component of total reserves, declined by $120 million to $470.727 billion during the week ended November 4, according to the weekly statistical supplement released by the Reserve Bank of India. Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units such as the euro, pound and yen held in foreign exchange reserves.
Gold reserves decreased by $ 705 million to $ 37.57 billion. Special Drawing Rights (SDRs) declined by $235 million to $17.39 billion.
The country’s reserve position with the International Monetary Fund (IMF) also declined by $27 million to $482 billion in the week under review, data from the apex bank showed.
Forex reserves are falling due to capital outflows amid slowdown concerns and since the RBI has spent a significant amount to strengthen the rupee. The domestic currency has depreciated by about 9 per cent during the current calendar year.
Meanwhile, the rupee on Friday strengthened for the fifth day to close 62 paise higher at 80.78 (provisional) against the US dollar on softening US CPI data as well as a fall in the dollar index. Forex traders said positive domestic equities and sustained foreign fund inflows also supported the local unit.
At the interbank forex market, the local unit opened at 80.76 and touched an intra-day high of 80.58 and a low of 80.99 against the greenback. The local unit finally closed at 80.78, registering a rise of 62 paise over its previous close of 81.40.
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