2 days ago
India’s Forex Reserves Suffer Record Drop as RBI Supports Rupee
India keeps foreign money and gold as a financial safety cushion called foreign exchange reserves.
During the week of September 25, that cushion became smaller by $18.34 billion.
The reserves ended the week at $747.56 billion.
This was the biggest one-week drop recorded in the data mentioned.
The Reserve Bank of India sold dollars to help support India’s currency, the rupee.
It also made deals to sell dollars now and buy them back later.
These actions reduced the amount of reserves for the time being.
Falling gold prices also made part of the reserves worth less when measured.
India’s foreign exchange reserves fell $18.34 billion to $747.56 billion in the week of September 25.
The decline was the largest weekly fall on record, according to Bloomberg-compiled data.
The Reserve Bank of India sold dollars to support the rupee.
The central bank also conducted sell-buy foreign-exchange swaps, reducing reserves temporarily.
Falling gold prices during the week also lowered the reserves’ value through revaluation.
- Who
- The Reserve Bank of India and India’s foreign exchange reserves.
- What
- Foreign exchange reserves fell by a record $18.34 billion to $747.56 billion.
- Where
- India and its foreign-exchange market.
- When
- In the week of September 25; the data was released on Friday.
- Why
- The Reserve Bank of India sold dollars and conducted sell-buy swaps to support the rupee; falling gold prices also reduced reserves through revaluation.
Key facts
- Reserve change
- Down $18.34 billion
- Reserves remaining
- $747.56 billion
- Record
- Largest weekly decline on record in the cited data
- Central bank action
- Dollar sales and sell-buy foreign-exchange swaps
- Currency supported
- Indian rupee
- Additional factor
- Falling gold prices caused some revaluation
- Data source
- Data released Friday; record comparison compiled by Bloomberg
Sources
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