The country's foreign treasury has decreased once again amid a continuous fall in the rupee
Foreign exchange reserves have been declining for the past few weeks. The reason for this decline is believed to be the RBI's intervention in the foreign exchange market to reduce the volatility in the rupee.
India's Foreign Exchange Reserves: In the last week of 2024, India's foreign exchange reserves have also decreased. In the week ended December 27, the country's foreign exchange reserves declined by $ 4.11 billion to $ 640.28 billion. In the previous week, the reserves had declined by USD 8.48 billion to USD 644.39 billion.
Foreign exchange reserves have been declining for the past few weeks. The reason for this decline is believed to be the RBI's intervention in the foreign exchange market to reduce the volatility in the rupee.
Foreign exchange reserves were at the highest level in September
The reserves had surged to a life-time high of USD 704.88 billion at the end of September. In the week ended December 27, foreign currency assets, a major component of the overall reserves, declined by USD 4.64 billion to USD 551.92 billion, the data showed.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the foreign exchange reserves. Gold reserves rose by USD 541 million to USD 66.27 billion in the reporting week, RBI data showed.
No change in reserves with IMF
Special drawing rights (SDRs) declined by USD 12 million to USD 17.87 billion. India's reserve position with the International Monetary Fund (IMF) remained unchanged at USD 4.222 billion in the reporting week, according to the RBI data.
Rupee hits all-time low
At the interbank foreign exchange market, the rupee depreciated by 4 paise to close at an all-time low of 85.79 (provisional) against the US dollar on Friday. Strong dollar demand from importers and a dovish trend in domestic equities dampened investor sentiment.
Forex traders said the dollar strengthened against most currencies during 2024 and has remained strong this year as well. The US dollar index has crossed the crucial 109 points.