October 10, 2021 3:22:18 am
The forex reserves slid by $1.169 billion to reach $637.477 billion during the week ended October 1, led by a fall in currency assets. In the week ended September 24, the foreign exchange — or forex — reserves had decreased by $997 million to $638.646 billion.
During the reporting week ended October 1, the fall in the forex kitty corresponded to a fall in the foreign currency assets (FCAs), a major component of the overall reserves. FCAs declined by $1.28 billion to $575.451 billion, according to weekly data by the Reserve Bank of India (RBI) released Friday.
Gold reserves were up by $128 million to $37.558 billion in the reporting week, the data showed. The special drawing rights (SDRs) with the International Monetary Fund (IMF) fell by $138 million to $19.24 billion. The nation’s reserve position with the IMF rose by $122 million to $5.228 billion.
Falling forex reserves may cause issues for the government and the RBI in managing the nation’s external and internal financial issues.
Higher reserves are a big cushion in the event of any crisis on the economic front and enough to cover the import bill. Higher reserves also help the rupee strengthen against the dollar.
With PTI inputes
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