Forex reserves fall $6.7 bn to $564 bn in 7 days, at 2-yr low: RBI

The country’s foreign exchange reserves fell by $6.69 billion to $564 billion for the week ended August 19, latest data released by the Reserve Bank of India (RBI) showed. The reserves are at its lowest level since October 2020.

In the last two weeks, the foreign exchange reserves fell by almost 9 billion.

According to data released by the RBI on Friday, the fall was mainly due to a decline in foreign currency assets, by $5.8 billion, followed by gold reserves by $704 million.

Foreign exchange reserves hit an all-time high for the week ended September 3, 2021 when it hit $642 billion – which was equivalent to covering more than 14 months of imports projected for 2021-22. In almost one year, reserves are down by $78 billion. The current level of reserves can cover about 9 months of imports projected for 2022-23.

The central bank has been selling dollars in the foreign exchange market aggressively to curb any sharp fall in the rupee, which is one of the main reasons for the reserves to fall. The rupee has fallen almost 7 per cent against the dollar in 2022.