April 11, 2021 1:13:54 am
The country’s foreign exchange reserves declined by $2.415 billion to stand at $576.869 billion in the week ended April 2, the Reserve Bank of India (RBI) data showed on Friday.
In the previous week ended March 26, the reserves had decreased by $2.986 billion to $579.285 billion. The forex kitty had touched a record high of $590.185 billion in the week ended January 29, 2021.
In the reporting week ended April 2, 2021, the decline in the reserves was mainly on account of a fall in foreign currency assets (FCAs), a major component of the overall reserves.
FCA declined by $1.515 billion to $536.438 billion, weekly data by the RBI showed. 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.
The gold reserves dropped by $884 million to $34.023 billion in the reporting week, as per the central bank data.
The special drawing rights (SDRs) with the International Monetary Fund (IMF) dipped by $4 million to $1.486 billion.
The country’s reserve position with the IMF declined by $12 million to $4.923 billion in the reporting week, the data showed.
The Reserve Bank functions as the custodian and manager of forex reserves, and operates within the overall policy framework agreed upon with the government. The RBI allocates the dollars for specific purposes. For example, under the Liberalised Remittances Scheme, individuals are allowed to remit up to $250,000 every year. The RBI uses its forex kitty for the orderly movement of the rupee. It sells the dollar when the rupee weakens and buys the dollar when the rupee strengthens.
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