India’s foreign exchange reserves decreased for a third week in a row, reaching a four-month low of $590.70 billion as of September 22, according to figures released on Friday by the Reserve Bank of India (RBI).
India’s forex reserves fall: That was a $2.3 billion drop from the prior week. In the two weeks prior, reserves had decreased by a total of $5.9 billion.
To stop the rupee from making wild swings, the central bank makes interventions in the spot and forwards markets.
According to traders, the RBI has likely been selling dollars through public sector banks during the past several trading sessions to stop the rupee from hitting a record low versus the dollar.
Changes in foreign currency assets, stated in dollar terms, other than the effects of the central bank’s involvement, include the effects of the appreciation or depreciation of other currencies held in the RBI’s reserves.
India includes its Reserve Tranche holdings at the International Monetary Fund in the country’s foreign exchange reserves.
The rupee increased 0.2% versus the dollar during the week to which the data on foreign exchange reserves applies, trading between 82.8225 and 83.2725.
However, On Friday, the rupee reached 83.04, declining 0.1% for the week.