New Delhi [India], January 12 (ANI): India’s foreign exchange reserves continue to decline, extending their slump for over three months now. India’s forex reserves have slumped thirteen out of the past fourteen weeks, hitting about a 10-month low.
In the week that ended January 3, the country’s foreign exchange kitty declined by USD 5.693 billion to USD 634.585 billion, the latest data from the Reserve Bank of India (RBI) showed.
The reserves had been falling ever since it touched an all-time high of USD 704.89 billion in September. Effectively, they are now over 10 per cent lower from the peak.
The reserves have been declining likely due to RBI intervention, aimed at aggressively preventing a sharp depreciation of the Rupee. The Indian rupee is now at its all-time low against the US dollar.
The latest RBI data showed that India’s foreign currency assets (FCA), the largest component of forex reserves, stood at USD 545.480 billion.
Gold reserves currently amount to USD 67.092 billion, with a USD 824 million jump last week, according to RBI data.
Estimates suggest that India’s foreign exchange reserves are sufficient to cover approximately one year or near-about of projected imports.
In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022.
In 2024, the reserves rose by a little over USD 20 billion. Without the latest decline, the reserves would have been much higher.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
The RBI closely monitors foreign exchange markets, intervening only to maintain orderly market conditions and curb excessive volatility in the Rupee exchange rate, without adhering to any fixed target level or range.
The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep Rupee depreciation.
A decade ago, the Indian Rupee was among the most volatile currencies in Asia. Since then, it has become one of the most stable. The RBI has strategically bought dollars when the Rupee is strong and sold when it weakens, enhancing the appeal of Indian assets to investors. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
HINDI, MARATHI, GUJARATI, TAMIL, TELUGU, BENGALI, KANNADA, ORIYA, PUNJABI, URDU, MALAYALAM
For more details and packages
