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India's Forex Reserves Fall $1.27 Billion to $719.75 Billion, Seventh Weekly Decline
Forex: According to Reserve Bank of India data, India's foreign exchange reserves declined by $1.269 billion to $719.748 billion in the week ended October 30. Learn about the reasons for the decline and the status of various components.
In a report released on Friday, the Reserve Bank of India reported that the foreign exchange reserves of the country have decreased by $1.269 billion in the week ending October 30. It is the second straight week where there has been a decrease in foreign exchange reserves. Total reserves have gone down to $719.748 billion. Earlier, the reserves had fallen by $5.011 billion in the week ending October 16.
There is no doubt that there is some concern regarding the fall in foreign exchange reserves. In the week ending September 4, the foreign exchange reserves had touched an all-time high of $785.706 billion. There were special concessional swaps for depositors from non-resident Indians. Banks had borrowed $133 billion under this plan. But, it has been on a steady fall since then. According to experts, it is because of the FCNR(B) resources. Currency hedging by the Reserve Bank of India through dollar sales is also a factor in the decline. This step was taken to stabilize the value of the rupee.
According to experts, there are several reasons for the sharp decline in foreign exchange reserves. The use of FCNR(B) resources is a key factor. The Reserve Bank of India has attempted to strengthen the rupee by selling dollars. This is seen as currency hedging. These steps have put pressure on reserves and are a way to prevent the rupee from falling.
