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Foreign exchange reserves of India fall to 2-year low

Mumbai: The foreign exchange (forex) reserves of the country touched 2-year low.  The forex reserves  slipped down below $550 billion for the first time in nearly 2 years. The weekly statistical supplement data released by Reserve Bank of India (RBI) revealed this. This is the 7th week in a row that the forex reserve is declining.

The weakening of the domestic currency is the main reason for this. Indian rupee had touched an all-time low of 81 against the US dollar on Friday. India’s forex has fallen for 24 of the 30 weeks since Russia invaded Ukraine in late February.  India  lost around $86 billion during this period. It has fallen more than $97 billion from its peak in late October last year. India’s forex reserves are the fourth largest globally.

Also Read: Commodity Market: Gold price slips down sharply 

The foreign exchange reserves of the country comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the country’s reserve position with the International Monetary Fund (IMF). FCA is the largest component of the forex reserves. It includes the effect of appreciation or depreciation of non-US currencies like the euro, pound, and yen held in the foreign exchange reserves.

India’s forex reserves fell by $5.219 billion to $545.652 billion in the week ending September 16. It was at  $550.871 billion in the prior week.   FCA declined by $4.698 billion to $484.901 billion. The value of the gold reserves fell by $458 million to $38.186 billion. The Special Drawing Rights (SDRs) decreased by $32 million to $17.686 billion and the country’s reserve position with the IMF fell by $31 million to $4.88 billion.


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