MUMBAI: India’s foreign exchange reserves declined for a seventh consecutive week, falling to a more than two-month low of $719.75 billion in the week ended October 23, according to data released by the Reserve Bank of India (RBI) on Friday.
The reserves dropped by $1.27 billion from the previous week, reflecting changes in the value of the central bank’s gold holdings and its efforts to meet dollar demand linked to oil imports and support the rupee.
The value of the RBI’s gold reserves fell by $2.6 billion to $103.1 billion during the week.
RBI Measures Add Pressure on Reserves
The decline follows a series of measures introduced by the central bank to support the Indian rupee amid currency market pressures.
Earlier this month, the RBI established a special window to supply dollars directly to three state-owned oil marketing companies to meet their daily foreign currency requirements.
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The central bank has also intervened in currency markets and conducted dollar-rupee sell-buy swaps to manage liquidity in the banking system.
These measures have contributed to the decline in reserves.
Previous Inflows Boosted Reserves
The earlier record was supported by measures that attracted approximately $143.5 billion in capital inflows between June 8 and September 18, including nearly $133 billion through foreign currency deposits.
However, while these deposits increase spot foreign exchange reserves, they also create future liabilities recorded in the RBI’s forward book.
The latest decline highlights the pressure on India’s external reserves as the central bank works to manage currency stability and meet demand for foreign exchange.
