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Informist, Friday, Dec. 27, 2024

 

MUMBAI – India's foreign exchange reserves fell to a near-eight-month low of $644.39 billion in the week ended Dec. 20, according to data released by the Reserve Bank of India. The reserves fell by $8.48 billion on a weekly basis. The decline in reserves was due to multiple factors, including the central bank's actions in the foreign exchange market, in addition to the valuation losses, market participants said. 

 

It was in the week ended Dec. 20, that the rupee fell below the psychologically crucial level of 85 a dollar. During the aforementioned week, market participants had noted the lack of aggressive dollar sales by the RBI to contain the fall in the rupee. In the week for which the reserves data was released, the rupee fell about 0.3% or about 23 paise against the greenback.

 

Some market participants said that since the RBI has been less aggressive in selling dollars off late, the reserves may have been impacted more owing to valuation losses. The yield on the benchmark 10-year US Treasury note rose 12 bps in the week ended Dec. 20. Yields and prices move in the opposite direction.

 

According to the data by the RBI, total foreign currency assets also fell by $6.01 billion in the week ended Dec. 13 to $556.56 billion.  End

 

Reported by Sourabh Kumar

Edited by Deepshikha Bhardwaj

 

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