India FX reserves fall to $654.86 bln in week to Dec 6, down $3.24 bln on wk
This story was originally published at 17:59 IST on 13 December 2024
Register to read our real-time news.Informist, Friday, Dec. 13, 2024
MUMBAI – India's foreign exchange reserves fell to $654.86 billion in the week ended Dec. 6, data released by the Reserve Bank of India showed. The reserves fell by $3.24 billion during the week. The fall in reserves was due to the RBI's active intervention in the foreign exchange market to curb runaway depreciation in the Indian currency, market participants said.
The RBI continuously sold dollars to prevent the rupee from falling against a globally firm greenback. "They were selling in spot and in offshore as well. The drawdown can be directly attributed to their interventions," a dealer at a brokerage firm said. The fear of further depreciation in the Indian unit kept importers on their toes as they looked to stock up on the US currency at every given opportunity.
The only slight respite came on Friday, when the RBI announced an increase in the interest rate ceilings on Foreign Currency Non-Resident (Bank) deposits in its monetary policy outcome. Former RBI governor Shaktikanta Das announced an increase in the interest rate ceilings on FCNR(B) deposits from one year to five years by 150 basis points. The RBI allowed banks to raise fresh FCNR(B) deposits between 1 year and less than 3 years at rates not exceeding the overnight alternative reference rate plus 400 bps compared with 250 bps earlier. The ceiling for deposits of 3 to 5 years was increased to the overnight alternative reference rate plus 500 bps against 350 bps earlier. The relaxation in ceiling will be available till Mar. 31.
This led to expectations of inflows, which provided some temporary relief to the currency, market participants said. However, the RBI's Monetary Policy Committee left the policy repo rate unchanged at 6.50% and retained its 'neutral' policy stance. End
US$1 = INR 84.7875
Reported by Kabir Sharma
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
