India’s forex reserves on Friday fell by $3.85 billion to $524.52 billion for the week ending on October 21, according to the latest data released by the Reserve Bank of India (RBI).
The reserves have been falling for the last nine weeks. It rose marginally by $204 million to $532 billion in the week ending on October 7 but again declined to $528.37 billion in the next week ending October 14.
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India’s forex reserves have fallen by more than $100 billion in comparison to the last year which recorded $624.4 billion.
RBI intervened in the forex market which led to falling in reserves to control inflation amid the Russia-Ukraine war and the US Federal Reserve’s policy tightening.
Besides, During the week, the rupee hit a record low of 83.29 against the dollar and the central bank was forced to intervene in spot and forward markets to contain the downfall.
The Indian rupee on Friday closed at 82.63 after touching a high of 82.72 against the US dollar.
As per experts, for now, the depletion of forex exchange reserves is not a big concern so, RBI may further continue to intervene in the forex markets.
As the whole world is dealing with the economic crisis, not only RBI but almost every central bank has intervened forex market by raising interest rates to curb soaring inflation, resulting in the global decline of reserves.
The currencies have also seen depreciation worldwide with the Japanese Yen depreciating the most.
China with the highest decline in foreign currency has lost $159 billion in its reserves between 1 April and 30 September.
Second comes India with $85 billion and Russia, whose war on Ukraine is one of the triggering points of this global economic crisis, has also lost $64 billion of forex reserves.
According to the International Monetary Fund global reserves have fallen by around $884 billion during the first half of 2022.
