Forex: India’s foreign exchange reserves continue to decline. The Reserve Bank of India (RBI) informed on Friday that the country’s foreign exchange reserves fell by $ 8.48 billion to $ 644.39 billion in the week ended December 20. Last week, the reserves fell by $ 1.99 billion to a six-month low of $ 652.87 billion.
Forex: Why is there a Decline in Foreign Exchange Reserves?
There has been a decline in foreign exchange reserves in the last few weeks. This decline is believed to be due to the intervention by the Reserve Bank of India in the foreign exchange market to prevent fluctuations in the rupee as well as changes in valuation.
India’s Foreign Exchange Reserves Decline After September High
The foreign exchange reserves rose to a record high of $704.88 billion at the end of September. According to data released on Friday, foreign exchange assets, a major component of the foreign exchange reserves, fell by $6.01 billion to $556.56 billion in the week ended December 20.
Foreign exchange assets in terms of US dollars include fluctuations in non-US currencies such as euro, pound and yen, which affect the total foreign exchange reserves.
Decline in the Value of Gold Reserves
The value of gold reserves fell by $2.33 billion to $65.73 billion during the week under review. Special drawing rights (SDRs) fell by $112 million to $17.88 billion. India’s reserve holdings in the International Monetary Fund (IMF) also fell by $23 million to $4.22 billion during the period, according to Reserve Bank data.
Foreign Exchange Reserves Discussed in Parliament
During the winter session of Parliament, there was a discussion about the country’s foreign exchange reserves, where the Ministry of Finance provided the latest forex data.
It was mentioned that in September, the foreign exchange reserves had reached an all-time high of $700 billion ($704.88 billion).
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