Indian Foreign Exchange Reserves Down by $2.39 Billion to $560 Billion: RBI Weekly Statistics

During the week ending March 10, the country's foreign exchange reserves decreased by USD 2.39 billion to a three-month low of USD 560.003 billion, according to the Central Bank's most recent weekly statistics release.

The reserves increased by USD 1.46 billion and reached USD 562.40 billion in the week ending March 3.

The reserves decreased by USD 47.31 billion on an annualized basis and by USD 62.23 billion on a fiscal year basis during the week under review, according to the RBI.

According to the weekly statistics supplement that the RBI provided on Friday, the forex kitty has decreased to its lowest level since early December as a result of this.

The revaluation of the foreign currency assets, the main part of the forex purse, which increased their value by USD 2.2 billion to USD 494.86 billion for the week ending March 10, is what caused the decline in reserves.

The value of foreign currency assets decreased by USD 45.86 billion year over year and by USD 59.49 billion during the course of the fiscal year.

Foreign currency assets, expressed in dollar terms, include the impact of appreciation or depreciation of non-US currencies held in foreign exchange reserves, such as the euro, the pound, and the yen.

The RBI sold dollars to reduce rupee volatility in the spot and forwards markets in order to stop the currency rate from moving too quickly, which is the main cause of the reserve losses.

The rupee was very stable last week, losing just 10 basis points to the dollar while trading in the range of 81.61-82.29. The rupee's Friday closing price was 82.55.

The nation's gold reserves and SDR holdings both fell by USD 110 million and USD 53 million, respectively, during the week under review. There are USD 41.92 billion in gold reserves and USD 18.12 billion in SDR holdings, respectively.

Moreover, the nation's reserve position with the IMF decreased by USD 11 million, down to USD 5.1 billion.

While the rupee has been under pressure and the monetary authorities has been taking action to protect the currency from excessive volatility, the reserves have been declining from their high. The cost of protecting a depreciating rupee in 2022 exceeded 115 billion USD of the reserves.

The reserves saw the greatest decline in the week ending February 10, falling precipitously by USD 8.32 billion to USD 566.95 billion.

The FX fund has risen to an all-time high of USD 645 billion in October 2021.