News Karnataka
Sunday, April 02 2023

Strengthening dollar dents India’s Forex reserves

Photo Credit :

Mumbai: Strengthening dollar coupled with attempts by the Indian central bank to curb volatility in rupee value depleted India’s foreign exchange (Forex) kitty by $149.7 million, experts said on Saturday.

Overall, the Forex reserves stood at $352.36 billion for the week ended November 20. India’s Forex kitty had gained by $780.9 million to $352.51 billion during the previous week ended November 13.

“The slight fall in the Forex reserves can be attributed to the dollar selling by Reserve Bank of India (RBI) to stabilise the rupee value,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

“The rupee value has come under pressure due to the heavy flight of foreign funds from India due to the upcoming US rate hike expected in December.”

Foreign funds have been on a selling spree in the Indian debt and equity markets ahead of the US Fed’s imminent rate hike decision slated for December.

On a weekly basis, the rupee had weakened by nine paise to 66.19 to a US dollar (November 20) from its previous close of 66.10 to a greenback (November 13).

The data with the National Securities Depository Limited (NSDL), showed that the FPIs (Foreign Portfolio Investors) sold Rs.5,459.41 crore or $825.49 million in equity and debt markets from November 16-20.

The data with stock exchanges showed that the FPIs sold stocks worth Rs.2,749.44 crore in the period under review ended November 20.

The FPIs have taken out Rs.23,352 crore during the period August-September. Till date in November, the foreign investors have off-loaded stocks worth Rs.5,809 crore.

The Indian central bank intervenes in the open markets, if the rupee value comes under heavy attack, by either buying or selling the greenback.

In addition, the RBI’s weekly statistical supplement revealed that the foreign currency assets (FCAs) receded by $133.5 million to $328.39 billion in the week under review.

“The FCA depletion happened on the account of dollar strengthening against the major global currencies like pound sterling, euro and yen which are held in reserve. The dollar appreciated by an approximate 1 percent against the global currencies,” the RBI was quoted as saying in its statistical supplement.

The FCA constitutes the largest component of India’s Forex reserves. It consists of US dollars, major non-dollar currencies, securities and bonds.

The US dollar is strengthening against emerging market currencies, gold and other assest classes ahead of the US rate hike.

Furthermore, the country’s gold reserves remained stagnant during the week under review at $18.69 billion. The gold reserves had risen by $540 million during the week ended November 6.

However, the special drawing rights (SDRs) were lower by $12.2 million at $3.98 billion.

The country’s reserve position with the International Monetary Fund (IMF) weakened by $4 million to $1.29 billion.

Share this:
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Leave a Reply

Your email address will not be published. Required fields are marked *

Rohan City Corp

Find the best odds at 10Cric and IPL Betting 2023! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp