India’s foreign exchange reserves plunged by more than $9.6 billion, the biggest drop in 2 years

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India’s foreign exchange reserves fell by more than $9.64 billion in the week ending March 11.

As a result, Reserve Bank of India data showed India’s foreign exchange reserves fell to $622.275 billion from $631.920 billion the previous week.

Analysts said a likely intervention by the Reserve Bank of India to halt the steep decline in the value of the rupee against the US dollar has depleted the reserve.

The RBI is known to enter the markets through intermediaries to sell or buy US dollars to keep the rupiah in a stable orbit.

Read also | Rising commodity prices to keep pressure on the rupee

According to reports, the latest decline in foreign exchange reserves is the largest in nearly two years. The country’s foreign exchange reserves include foreign currency assets (FCA), gold reserves, SDRs, and the country’s reserve position with the IMF.

On a weekly basis, FCA, the largest component of foreign exchange reserves, fell slightly by $11.108 billion to $554.359 billion. However, the value of the country’s gold reserves increased by $1.522 billion to $43.842 billion. The value of the SDR fell $53 million to $18.928 billion.

In addition, the country’s reserve position with the IMF fell from $7 million to $5.146 billion.

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