India’s foreign exchange reserves fell by nearly $2 billion to a six-month low of $652.87 billion as of December 13, Reserve Bank of India (RBI) data showed on Friday.
Reserves fell by $3.2 billion in the week to December 6, and are down $52 billion from a record high of $704.89 billion hit on September 27.
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.
The RBI intervenes on both sides of the foreign exchange market to prevent undue volatility in the rupee.
Last week, the rupee fell to an all-time low of 84.88, under pressure from a weakening yuan and persistently strong dollar bids in the non-deliverable forward market. The currency fell 0.1% last week.
The domestic unit ended Friday at 85.0150, down for a seventh straight week. It hit a record low of 85.10 earlier in the day, following a hawkish turn in the Federal Reserve’s future outlook on policy rates.
Foreign exchange reserves also include India’s reserve installment position with the International Monetary Fund
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