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HomeBusinessIndia's Forex Reserves Decline $70 Billion To $563 Billion In 2022; Details...

India’s Forex Reserves Decline $70 Billion To $563 Billion In 2022; Details Here

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Edited By: Mohammad Haris

Last Updated: January 07, 2023, 12:05 IST

In October 2021, the country's foreign exchange kitty had reached an all-time high of $645 billion.

In October 2021, the country’s foreign exchange kitty had reached an all-time high of $645 billion.

India’s foreign exchange reserves jump $44 million to $562.85 billion in the last week ended December 30

India’s foreign exchange (forex) reserves jumped $44 million to $562.85 billion in the last week ended December 30, according to the latest RBI data. However, the data showed that during the whole year 2022, the country’s forex reserves declined by $70.1 billion.

The forex reserves during 2022 saw a decline due to the RBI intervention in the currency market to control the volatility and bolster the rupee. The RBI net sold $33.42 billion till September, Union finance minister Nirmala Sitharaman had said in the Lok Sabha earlier.

In October 2021, the country’s foreign exchange kitty had reached an all-time high of $645 billion.

According to the RBI data, the central bank’s gold reserves rose $354 million to $41.32 billion during the week ended December 30. Its foreign currency assets declined $302 million to $498.19 billion in the week ended December 30. During the previous week, the rupee appreciated by a marginal 0.2 per cent against the dollar.

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 Indian rupee this year saw a sharp decline hitting all-time lows multiple times. In the current calendar year, the rupee has declined about 12 per cent to 82.85 now after plunging to all-time lows multiple times. The domestic currency had stood at 73.77 to a dollar on January 12, 2022.

The rupee witnessed a decline this year mainly due to the strengthening of the American currency, risk-averse sentiment among investors, and escalation of geopolitical risks due to the conflict in Ukraine.

The major reason for falling the rupee in the past few months was the continuous outflow of dollars due to the exit of foreign portfolio investors (FPIs). However, after nine straight months of net outflows since October 2021, FPIs in July became net buyers.

In the previous week ended December 23, falling for the consecutive week of decline in the exchequer, India’s forex reserves had declined by $691 million. Gold reserves had increased by $390 million to $40.969 billion, it said.

The special drawing rights (SDRs) were up by $8 million to $18.19 billion. The country’s reserve position with the International Monetary Fund (IMF) was up by $45 million to $5.16 billion in the reporting week.

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