Forex Reserve: Foreign exchange reserves decreased by $ 9.6 billion this week, the biggest weekly decline in two years

According to data released by the Reserve Bank of India on Friday, the country's foreign exchange reserves fell by $ 9.6 billion to $ 622.3 billion for the week ended March 11. Significantly, this was the sharpest weekly decline in the last two years. According to the RBI, the fall was due to the depletion of foreign currency assets, which constitute a significant part of the total reserves.

There was a big drop in March 2020

Talking about the last two years, before this, a decline of $ 11.9 billion was recorded in the foreign exchange reserves in the week ended March 20, 2020. Earlier, in the week ended March 4, foreign exchange reserves had increased by $ 394 million to $ 631.92 billion. Let us inform you that in September 2021 last year, the foreign exchange reserves had reached a record level of $ 642.453 billion. Foreign currency assets held in foreign exchange reserves, expressed in dollars, include the rising and falling effects of non-US currencies such as the euro, pound, and yen.

This time also increase in gold reserves

According to RBI data, the country's gold reserves have increased by $ 1.522 billion in the week under review and it has increased to $ 43.842 billion. In the week under review, special drawing rights (SDRs) with the International Monetary Fund (IMF) declined by $53 million to $18.928 billion. According to the report, the country's currency reserves kept with the IMF have come down by $ 7 million to $ 5.146 billion.

$20 billion less than high

Stocks are currently down about $20 billion from their all-time high of 642 billion dollars. The period of decline in forex reserves coincides with the week that saw record intervention by the central bank after the rupee breached 77 on March 7. The Indian currency came under pressure in the wake of the deteriorating situation in Ukraine, followed by sanctions imposed by western countries, leading to crude oil prices reaching the level of $140. Going forward, the rupee will depend on the direction of the conflict in Ukraine. If oil supply is ensured at $80-85 through concessional supplies from Russia or easing of global prices, the rupee should remain stable. But if the price crosses $100, it will again come under pressure.

Also Read: Effect of Russia-Ukraine war: SBI cuts India's GDP growth forecast, the rupee will break further against the dollar