Forex reserves fall $5.4 billion after an 8-week increase

The weekly statistics issued by the RBI on Friday show that as of April 12, India’s foreign currency reserves had decreased by $5.4 billion to $643.16 billion.

After reaching all-time highs in the previous weeks, the foreign currency reserves are declining for the first time in eight weeks. The RBI aggressively releasing dollars into the market to reduce rupee volatility is what market watchers blame for the fall.

When oil prices have increased, the need for dollars to fund more expensive imports has increased, which has caused the Indian rupee to tend to weaken.

According to figures published on Friday, for the week ending April 12, the foreign currency part of the reserves decreased by as much as $6.51 billion. The RBI’s holdings of gold assets saw a $1.24 billion boost in value, however, which helped to offset the decline in the FX kitty.