India’s forex reserves decline for 7th straight week to 4-month low of $657.89 bn

India’s foreign exchange reserves logged their sharpest weekly decline on record, dropping by $17.8 billion in the week of November 15, 2024, to a more-than-four-month low of $657.89 billion, according to data from the Reserve Bank of India (RBI).

This marked the largest weekly fall since available data starting 1998, , data from the Reserve Bank of India (RBI) showed on Friday, Reuters reported.

The sharp drop was triggered by a strengthening dollar following the US election results, as well as the RBI’s interventions in the forex market to limit the rupee’s depreciation. The central bank likely net sold $7.2 billion worth of dollars during the week, while revaluation losses amounted to approximately $10.4 billion.

India’s forex reserves have fallen by nearly $30 billion over the past six weeks and are down by $47 billion from the all-time high of $704.89 billion reached in late September.

The rupee, which fell to a record low of 84.4125 against the dollar during the week, stabilised at 84.4450 on Friday, after hitting an all-time low of 84.5075 earlier in the session.

Persistent foreign investor outflows from Indian equities have continued to pressure the rupee, with net sales of over $4 billion in November following October’s withdrawals of $11.7 billion.

Gold reserves decreased by $2.068 billion to $65.746 billion, while the Special Drawing Rights (SDRs) fell by $94 million to $18.064 billion. India’s reserve position with the International Monetary Fund (IMF) also declined by $51 million to $4.247 billion during the same period.