India’s forex reserves decline after three weeks’ rise

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MUMBAI: India’s foreign exchange reserves declined by $1.494 billion to $575.267 billion in the week ending on February 3, according to the Reserve Bank of India’s latest data.

This decline snapped the previous three straight weeks’ rise in overall reserves.

During the week that ended on January 27, the reserves rose by $3.03 billion to $576.761.

According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, declined by $1.323 billion to $507.695 billion.

Gold reserves declined by $246 million to $43.781 billion. At the start of last year — 2022, the overall forex reserves were at about $633 billion.

Much of the decline can be attributed to RBI’s intervention and a rise in the cost of imported goods. In October 2021, the country’s foreign exchange reserves reportedly touched an all-time high of about $645 billion.

Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

Meanwhile, in the Economic Survey for 2022-23 tabled in the Parliament on January 31, the government said foreign exchange reserves are comfortable and external debt is low. (ANI)

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