edited by: Mohammad Haris
Last Update: January 14, 2023, 08:13 AM IST
In October 2021, the country’s foreign exchange reserves were to reach an all-time high of $645 billion.
Gold reserves increased by $461 million to $41.78 billion; SDR increased by $35 million to $18.22 billion
A week after increasing by $44 million, India’s foreign exchange reserves declined by $1.268 billion to $561.583 billion for the week ended January 6, according to the latest data from the Reserve Bank of India. India (RBI). Total reserves had increased by $44 million to $562.851 billion last week after two consecutive weeks of decline.
In October 2021, the country’s foreign exchange reserves reached an all-time high of $645 billion. Reserves were falling as the central bank deployed reserves to protect the rupee amid pressure due to global developments.
Foreign exchange reserves during 2022 saw a decline due to RBI intervention in the money market to control volatility and strengthen the rupee. Union Finance Minister Nirmala Sitharaman had earlier said in the Lok Sabha that the RBI’s net sales till September stood at $33.42 billion.
Anil Kumar Bhansali, head (treasury), Finrex Treasury Advisors, said, “India had foreign exchange reserves of $145.9 billion in 2005-06, which increased to $322.16 billion in 2015-16. In March 2019, the reserves increased to $411.91 billion and at the beginning of the pandemic, the reserves increased to $475.56 billion. On October 29, 2021, the reserves stood at an all-time high of $642.02 billion as the RBI absorbed all inflows in the form of FDI, FPI and NRI deposits that came during and after the pandemic.”
However, he added that the rupee started depreciating about 11.30 per cent during the year from a level of 74.57 at the beginning of January 2022 to around 83 at the end of 2022. This was due to outflow of foreign investment, strengthening of the dollar, costlier crude oil and high inflation across the globe.
The latest weekly statistical supplement released by the RBI showed that during the week to January 6, foreign currency assets (FCAs), a key component of total reserves, declined by $1.747 billion to $496.441 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.
Gold reserves increased by $461 million to $41.784 billion. The apex bank said special drawing rights (SDRs) rose by $35 million to $18.217 billion.
The country’s reserve position with the International Monetary Fund (IMF) declined by $18 million to $5.141 billion in the week under review, the data showed.
(With inputs from PTI)
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