India’s forex reserves fell by another $4.112 billion during the week ended December 27, 2024, as the Reserve Bank of India sold $4.641 billion to help reduce volatility in the rupee.
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India’s foreign exchange (forex) reserves declined by $4.112 billion to an eight-month low of $640.279 billion during the week ended December 27, according to the latest RBI data. In the previous week, the overall kitty had dropped by $8.478 billion to $644.391 billion.
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India’s forex reserves have been declining for the past few weeks, and the fall has been attributed to revaluation along with forex market interventions by the RBI to help reduce volatility in the rupee. The forex reserves had increased to an all-time high of $704.885 billion in end-September.
“The forex reserves fell by another $4.112 billion to $640.279 billion as the Reserve Bank of India (RBI) sold $4.641 billion,” Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said.
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He added that it seems that the RBI was buying dollars from in the NDF (non-deliverable forwards)/futures to close its month-end maturing open short dollar positions. This was the week when the rupee fell from 84.99 to 85.82 before closing at 85.5325.
For the week ended December 27, foreign currency assets, a major component of the reserves, decreased by $4.641 billion to $551.921 billion.
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Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
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Gold reserves increased by $541 million to $66.268 billion during the week. The special drawing rights (SDRs) were down by $12 million to $17.873 billion, according to the RBI.
India’s reserve position with the IMF was unchanged at $4.217 billion in the reporting week, the apex bank data showed.
