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India’s forex reserves slump by another $2.59 billion

By Priyanka Verma 
Updated Date

Mumbai: India’s foreign exchange (forex) reserves dipped by $2.59 billion in the week ending March 18, recording a sharp drop for the second consecutive week as the Reserve Bank of India (RBI) heavily sold dollars to prevent slide in the value of rupee.

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The forex reserves were declined by $2.59 billion to $619.678 billion during the week ended on March 18. The value of gold reserves, as well as, foreign currency assets also declined sharply. The value of gold reserves slumped by $1.831 billion to $42.011 billion during the week under review.

This is the second consecutive week of a sharp drop in the country’s forex reserves.

For the week ending March 11, India’s forex reserves had slumped by $9.646 billion, the sharpest decline in nearly two years. The sharp decline in the country’s forex reserves coincides with the week during which the rupee hit an all-time low. The Indian rupee plunged to a record low of 77.02 against a US dollar on March 7.

The foreign currency assets, which is the biggest component of the forex reserves, fell by $703 million to $553.656 billion during the week ending March 18. The foreign currency assets had dipped by $11.108 billion in the previous week.

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Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-dollar currencies like Euro, UK’s Pound Sterling and Japanese Yen held in the foreign exchange reserves.

The value of gold reserves slumped by $1.831 billion to $42.011 billion during the week under review. The value of gold reserves had increased by $1.522 billion in the week ended March 11 due to a sharp increase in gold prices in the international markets.

The value of India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined by $62 million to $18.865 billion. However, India’s reserve position in the IMF remained unchanged at $5.146 billion during the week ended March 18, the RBI data showed.

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