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Fall in India forex reserves continues; down to $314bn

Falling for the fourth week in a row, India’s foreign exchange reserves went down by USD 1.415 billion to USD 314.181 billion in the week to September 26 on account of a hefty drop in non-US currency assets

Fall in India forex reserves continues; down to $  314bn

Falling for the fourth week in a row, India’s foreign exchange reserves went down by USD 1.415 billion to USD 314.181 billion in the week to September 26 on account of a hefty drop in non-US currency assets.

In the previous week, the reserves had fallen by USD 101.3 million to USD 315.596 billion.

During the week to July 25, the reserves had touched USD 320.56 billion, a shade away from the life-time high of USD 320.79 billion recorded on September 2, 2011.

During the reporting week, the foreign currency assets (FCAs), a major constituent of overall reserves, dropped by USD 1.391 billion to USD 287.392 billion, RBI data showed. FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of the non-US currencies such as the euro, pound and yen held in reserves.

Reserve Bank Governor Raghuram Rajan has described the fall in reserves as dip in valuation with appreciation of dollar against other currencies. “In the recent weeks the dollar has been appreciating against the other currencies. Therefore, when we look at our reserves in dollar terms, they have been coming down,” Rajan had said on the policy day on Tuesday.

He added that the fall in the forex kitty was not due to the central bank selling the greenback.

The gold reserves remained unchanged in the week under review at USD 20.933 billion. The special drawing rights were down USD 17.4 million to USD 4.307 billion, while the country’s reserve position with the IMF dipped by USD 6.2 million to USD 1.548 billion during the week, the data showed.

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