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India’s forex reserves drop for fifth week amid RBI’s possible intervention to support rupee

India’s foreign exchange reserves declined for the fifth consecutive week, dipping by $2.675 billion to $682.130 billion. This trend may indicate RBI’s market intervention to support the rupee amid currency volatility. Discover how reserve changes impact India’s economy and stability.

Edited By: Nitin Kumar @Niitz1 New Delhi Published : Nov 08, 2024 18:46 IST, Updated : Nov 08, 2024 18:53 IST
India’s foreign exchange reserves
Image Source : FREEPIK Coins, paper money and globe on white statistical background

India’s foreign exchange reserves fell for the fifth consecutive week, falling $2.675 billion to $682.130 billion in the week ended November 1, according to RBI data. The record reserves of $704.885 billion are slowly dwindling, likely due to RBI intervention to support the rupee.

Reserve levels falling after all-time highs

Recent reserve declines that peaked last month included $3.7 billion, $10.7 billion, $2.16 billion and $3.463 billion in recent weeks. Current foreign reserves, including foreign currency assets (US$589.849 billion) and gold reserves (69.751 billion USD) was enough to cover about one year of projected imports.

RBI’s guidelines for rupee stability

While the RBI intervened to maintain market stability without a specific exchange rate target, it has historically managed the exchange rate by buying dollars when the rupee was stronger and sales when it was weak. This move has helped reduce volatility in the rupee, making it one of Asia’s most stable currencies and making India more attractive to foreign investors.

 

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