The country’s foreign exchange reserves dipped to a 13-month low to $293.5 billion for the week ended January 6, 2012, down by $3.1 billion from the previous week. Data released by the Reserve Bank of India (RBI) showed the drop was mainly on account of revaluation in the foreign currency assets which fell by $3 billion to $260 billion.
According to economists, intervention by the central bank in the foreign exchange market to curb the free fall of the rupee has been the main reason for the drop in foreign currency assets. RBI has been selling dollars in the foreign exchange market in order to prevent sharp fall in the currency of Asia's third-largest economy.
It sold $2.9 billion in November, the highest amount of dollars sold by the regulator in two and a half years, $943 million in October and $845 million in September, last year.Gold reserves remained steady at $26.6 billion after dropping $1.4 billion in the week before, the special drawing rights and the reserve position in the International Monetary Fund fell by $14.8 million and $9.1 million respectively.
While the SDRs stood at $4.4 billion, the reserve position in the IMF was $2.7 billion for the reporting period.
The foreign exchange reserves stood at $ 293.97 billion as on November 26, 2010.