look news india
Ahmedabad: India’s foreign exchange reserves are getting a big blow due to one-sided selling by foreign investors in the Indian stock market and on the other hand, the fall of the rupee against other currencies including the dollar. India’s foreign exchange reserves have seen their biggest decline in history in recent weeks due to massive withdrawals.
According to the report of the Reserve Bank of India, in the week of November 15, the country’s foreign exchange reserves have decreased for the seventh consecutive week. Total reserves fell by $17.8 billion in the week under review to a four-month low of $657.89 billion.
The dollar strengthened after the US election results and the sharpest decline on record in foreign exchange reserves since 1998 as the central bank used reserves to stem the depreciation of the Indian currency, the rupee. Changes in FCA occur due to central bank intervention in the foreign exchange market as well as appreciation or depreciation of foreign currency held in reserves.
Foreign exchange reserves have declined by nearly $30 billion over the past six weeks, and are $47 billion below the record high of $704.89 billion seen in late September.
According to official estimates from the banking sector, revaluation losses due to revaluation of the Indian rupee and other currencies are estimated at $10.4 billion for the week under review, while the RBI would have made net sales of $7.2 billion of the US dollar currency in the week. Of 15th November. Despite the recent decline, India’s foreign exchange reserves remain strong in terms of all external adequacy requirements and the import cover can be comfortably met in 11 months.
Last week, the rupee hit a new historic low of 84.4125 against the dollar. The Indian currency closed at 84.4450 against the dollar in Friday’s session, having touched an all-time low of 84.5075 in the earlier session, putting pressure on the rupee. The November 22 session saw selling worth Rs 1,278 crore by foreign investors for the 38th consecutive session.
Foreign investors have sold domestic stocks and bonds worth more than $4 billion so far in November, a historic figure of more than Rs 1 lakh crore, after selling $11.7 billion in October.
The Reserve Bank’s intervention to prevent further decline of the rupee against the dollar in the currency market is also being considered as a reason for the decline in foreign exchange reserves. For the first time this year, the level of foreign exchange reserves crossed 700 billion dollars, but the reserves have declined due to selling by foreign investors in the stock market. Gold reserves have decreased by two billion dollars to 65.70 billion dollars. India ranks fourth in terms of foreign exchange reserves after China, Japan and Switzerland.