New Delhi: The country’s foreign exchange reserves declined by $2.39 billion to a three-month low of $560.003 billion in the week ended March 10, the Reserve Bank said in its latest weekly data. In the week ended March 3, the reserves increased by USD 1.46 billion to USD 562.40 billion. On an annual basis, the RBI said, reserves declined by USD 47.31 billion during the week under review, while on a fiscal basis, declined by USD 62.23 billion.
With this fall, the forex kitty is at its lowest level since early December, according to the weekly statistical supplement released by the RBI on Friday. The loss in reserves is due to revaluation of foreign currency assets, the largest component of foreign exchange reserves, by USD 2.2 billion to USD 494.86 billion for the week to March 10. ,Also read: Will Rupee replace Dollar? Indian currency inching closer to becoming an international currency – Check out the list of countries that have agreed to trade in INR,
On a year-on-year basis, the value of foreign currency assets declined by US$ 45.86 billion and from a financial year perspective, they suffered a loss of US$ 59.49 billion. 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. ,Also read: Breakup can be beneficial! Check out this couple’s heartbreak insurance fund scheme,
The reserve deficit is mainly due to the sale of dollars by the Reserve Bank of India to prevent rupee volatility in the spot and forward market from a sharp rise in the exchange rate. Last week, the rupee stood its ground and lost just 10 basis points against the dollar and the currency traded in the range of 81.61-82.29. The rupee had closed at 82.55 on Friday.
The country’s gold reserves and SDR holdings also saw a decrease in the week under review, with both the reserves falling by USD 110 million and USD 53 million, respectively. Gold reserves and SDR holdings stand at USD 41.92 billion and USD 18.12 billion, respectively.
The country’s reserve position with the IMF also fell by USD 11 million to USD 5.1 billion. The rupee is under pressure as reserves are falling from the peak and monetary authorities are taking measures to protect the rupee from excessive volatility.
In 2022, the cost of saving the falling rupee was more than US$115 billion. The worst fall was in the week of February 10 when the reserves fell by US$ 8.32 billion to US$ 566.95 billion.
In October 2021, the forex kitty was set to reach an all-time high of USD 645 billion.