Lagatar24 Desk
New Delhi, April 23: The data released by Reserve Bank of India on Friday, India’s foreign exchange reserves fell for the sixth week in a row, declining by $311 million to $603.694 billion in the reporting week of April 15.
According to central bank data, forex reserves declined by $2.471 billion in the previous reporting week, which concluded on April 8.
The dollar’s recent increase, led by the Federal Reserve’s strong stance on policy tightening to combat increasing inflation, has resulted in dwindling currency reserves, with US policymakers publicly backing larger and quicker interest rate hikes.
Inflation has risen rapidly over the world as the Russia-Ukraine conflict has exacerbated supply chain disruptions already caused by the virus.
On interest rate dynamics, the dollar index, which measures the greenback’s performance against a basket of six currencies, surged to a two-year high this week, breaking above the 100-level mark and reaching a two-decade high against the yen.
The dollar has risen in value as a result of the interest rate gap, putting pressure on currency reserves in Sri Lanka and Nepal.
India has not been spared, despite the fact that its import cover remains substantial at over $600 billion, despite a drop in its foreign exchange reserves for the sixth week in a row.
Gold reserves increased by $626 billion to $43.145 billion, while the International Monetary Fund’s (IMF) special drawing rights (SDRs) decreased by $44 million to $18.694 billion.
India’s reserve position with the IMF declined by $16 million to $5.086 billion during the reporting week, according to RBI data.
