India's forex reserves drop for 4th consecutive week to $734.6B
What's the story
India's foreign exchange reserves have witnessed a decline for the fourth consecutive week, now standing at $734.6 billion. The drop comes from a recent high of $785.71 billion on September 4, marking a decrease of nearly $50 billion in less than a month. The Reserve Bank of India (RBI) has stepped in to intervene in the market and support the rupee amid rising pressures.
Intervention strategies
Reserve Bank of India intervenes to support rupee
The decline in forex reserves reflects the RBI's dollar sales in the spot market and FX swaps.
These are aimed at stabilizing the rupee's fall and absorbing excess liquidity.
However, despite these measures, the rupee has continued to weaken.
This is due to high oil prices, rising US Treasury yields, and increased foreign equity outflows that are putting pressure on India's currency.
Currency performance
Rupee falls almost 0.5% against the dollar
Today, the rupee fell almost 0.5% to 96.8450 per dollar, just shy of its all-time low of 96.96.
This shows how global pressures are weighing on India's currency despite RBI's intervention in the market to support its value.
The central bank's efforts include measures such as dollar sales and FX swaps aimed at stabilizing liquidity and supporting the rupee amid these challenging conditions.