With the rupee coming under tremendous strain—trading below the critical 84 mark for over two weeks—the RBI has been selling dollars to defend the currency, resulting in a $2.163 billion decline in forex reserves, which now stand at $688.267 billion for the week ending October 18.
The rupee reached a new low on Friday, closing at 84.077 against the dollar. The previous low was 84.075 on Thursday. The rupee is under pressure as foreign investors are dumping shares at an alarming rate—having sold just over $10 billion in October alone, making this month the worst for sell-offs by foreign investors.
This is the third consecutive weekly fall after seven successive weekly rise wherein the Reserve Bank had added more than of $35 billion to the kitty, taking it past $704 billion for the week ending September 27.
In the previous reporting week, the overall kitty had dropped by a hefty $10.746 billion to $690.43 billion, making it the third largest declines in the reserves in recent times. In the preceding week, the reserves had dropped by $3.709 billion to USD 701.176 billion. At the end of September, the reserves had hit an all-time high of $704.885 billion.
For the week to October 18, the weekly statistical supplement showed Friday that the foreign currency assets, which are biggest component of the reserves, fell by $3.865 billion to $598.236 billion.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Reflecting the massive spike gold prices, which had crossed a record $2750/ounce mark, gold reserves increased by $1.786 million to $67.444 billion during the week, the RBI said.
The special drawing rights with the IMF were down by $68 million to $18.271 billion, the apex bank said, adding the reserve position with the IMF was also down by $16 million to $4.316 billion in the reporting week, the apex bank data showed.