India’s foreign exchange reserves fell for the third consecutive week and stood at a more than one-month low of $688.27 billion as of October 18, according to data from the Reserve Bank of India ( driven ) showed on Friday. Reserves fell in the reporting week by $2.16 billion. In the previous two weeks, a total of $14.5 billion had fallen.
Changes in foreign currency assets are caused by central bank intervention in the foreign exchange market, as well as appreciation or depreciation of foreign assets held in reserves.
He driven intervenes on both sides of the foreign exchange market to prevent undue volatility of the rupee. In the period to which the foreign exchange reserves data pertains, the rupee had fallen to a record low of 84.0775 per US dollar, pressured by capital outflows. But it managed to avoid bigger losses, helped by sustained dollar sales by state-run banks, probably on behalf of the RBI, traders said.
Foreign investors have withdrawn more than $9.5 billion, on net, so far this month from local stocks, surpassing the previous record monthly outflow of $8.35 billion in March 2020.
Foreign exchange reserves also include India’s reserve tranche position in the International Monetary Fund. The currency closed at 84.08 per dollar and was little changed week after week.
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