Mumbai, Nov 18: India’s foreign exchange reserves dropped for a sixth consecutive week to a near three-month low of $675.65 billion as of November 8, data from the Reserve Bank of India (RBI) showed on Friday.The reserves fell by $6.5 billion in the reporting week and are down $29.2 billion from the record-high of $704.89 billion hit in late September.
Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
The RBI intervenes on both sides of the forex market to prevent undue volatility in the rupee.
In the period for which the forex reserves data pertains, the rupee had weakened to its then-all-time low of 84.38, pressured by a surge in dollar strength and US bond yields following Donald Trump’s victory in the U.S. elections.
The central bank’s strong interventions helped the local currency avert deeper losses, traders said.
The currency settled at 84.3950 on Thursday, after slipping to a record low earlier in the week.
The forex reserves also include India’s reserve tranche position in the International Monetary Fund.