EconomyRBI
Forex reserves fall for an eighth week, by $2.69 billion to $717 billion
India's foreign exchange reserves slipped again in the week to October 30, the Reserve Bank's data showed on Friday. They are now nearly $69 billion below the record set in early September.
Key points
- Reserves fell $2.691 billion to $717.056 billion in the week to October 30.
- Foreign currency assets, the biggest part, dropped $2.088 billion to $591.118 billion.
- The pile is about $68.7 billion below the record of $785.706 billion set in early September.
India’s foreign exchange reserves fell $2.691 billion to $717.056 billion in the week to October 30, data released by the Reserve Bank of India on Friday showed. It was the eighth weekly fall in a row.
The drop was bigger than in the week before, when reserves slipped $1.269 billion to $719.748 billion. The pile now stands about $68.7 billion below its record of $785.706 billion, reached in the week ended September 4.
Where the money went
Foreign currency assets, the largest part of the reserves, dropped $2.088 billion to $591.118 billion. These are held in dollars, euros, pounds and yen, so their value also moves with exchange rates. Gold reserves fell $559 million to $102.591 billion and Special Drawing Rights slipped $47 million to $18.558 billion. India’s reserve position with the International Monetary Fund edged up $3 million to $4.79 billion.
Why reserves keep falling
The September record came after a special concessional swap window for deposits from Indians abroad, through which banks raised a record $133 billion. Since then, analysts say, two things have pulled the total down: banks putting the money raised in FCNR(B) deposits to use, and the Reserve Bank selling dollars to defend the rupee.
The figures cover the week to October 30, before the rupee’s latest run. On Friday the currency rose 52 paise to 93.89 to the dollar, its strongest close since April, as foreign investors poured money into Indian shares. The Reserve Bank’s weekly data for November will show whether it still needed to sell dollars once the rupee turned.
The next weekly figures are due on Friday, November 13.