India’s foreign exchange reserves nearly hit a nine-month low and fell by $5 billion to $302 billion for the week ended December 16, on account of revaluation in foreign currency assets. According to the Reserve Bank of India (RBI), foreign currency assets fell by $4.7 billion to $267 billion.
While gold reserves remained intact at $28 billion, there was a dip in special drawing rights (SDR). SDRs fell by $54 million to $4.4 billion. However, the reserve position in the International Monetary Fund (IMF) rose by $47 million to $2.6 billion during the reporting period.
The foreign exchange reserves stood at $301.8 as on March 11.
Depreciation in the rupee by 19 per cent in the last four months has led to a slew of measures being announced by the RBI in order to enhance dollar liquidity. Steps taken by the regulator include deregulation of interest rates on non-resident (external) accounts (NRE) and non-resident ordinary rupee accounts (NRO); increase of cap on spreads of external commercial borrowings (ECB), and putting a curb on cancellation and rebooking of forward contracts in the over the counter market (OTC) by banks.
The central bank has also sold $1.8 billion in this financial year, according to the latest data released by the RBI. The intervention was done during September and October, in order to curtail volatility in the rupee.
