Lagatar24 Desk
New Delhi, April 9: As the rupee declined in value, the country’s currency reserves decreased by $11.173 billion to $606.475 billion, the fourth consecutive weekly drop and the largest weekly drop on record.
According to the Reserve Bank of India’s latest data, the rupee has taken a knock due to expectations of increasing external deficits as a result of the Ukraine crisis and a rising dollar, boosted by the US Federal Reserve’s aggressive monetary policy tightening posture.
The country’s currency reserves have dropped for the fourth week in a row. The reserves had fallen by $2.03 billion to $617.648 billion in the previous week, according to the RBI’s weekly statistical supplement.
In the last four weeks, India’s reserves have fallen by roughly $27 billion.
The latest record weekly drop in reserves was due to a drop in core currency assets, which fell by $10.727 billion to $539.727 billion, implying that the RBI intervened in the open market to protect the rupee.
The prior weekly drop was $9.6 billion in the week ending March 11th.
Typically, the RBI intervenes in the currency market by selling from its reserves kitty to decrease volatility. The currency markets have been impacted by Russia’s invasion of Ukraine.
The consequences from the Russia-Ukraine conflict will keep India’s balance of payment (BoP) risks elevated for some time, according to Barclays.
The value of gold reserves fell by $507 million to $42.734 billion for the reporting week, according to RBI statistics.
The International Monetary Fund’s (IMF) special drawing rights (SDRs) grew by $58 million to $18.879 billion, according to the statistics.
In the reporting week, the country’s reserve position with the IMF increased by $4 million to $5.136 billion, according to the RBI.
