The country’s foreign exchange reserves fell by $7.541 billion to $572.712 billion in the week ended July 15 as the Reserve Bank continued to intervene in the market to curb the rupee’s slide. In the previous week ended July 8, reserves fell by $8.062 billion to $580.252 billion, data from the Reserve Bank of India (RBI) showed on Friday.
On Friday, the Rupee fell 5 paise to close at 79.90 against the US Dollar. It had touched an all-time intraday low of 80.06 against the US dollar on Thursday.
In the reporting week ended July 15, the drop in reserves was due to a decline in foreign exchange assets (FCA), a major component of overall reserves, as well as gold reserves, the central bank said. .
FCAs fell $6.527 billion to $511.562 billion in the reporting week, according to the weekly statistical supplement released by RBI.
Expressed in dollars, FCA includes the effect of the appreciation or depreciation of non-US units such as the euro, the pound and the yen held in foreign exchange reserves.
Gold reserves fell by $830 million to $38.356 billion in the reporting week.
Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) fell by $155 million to $17.857 billion, RBI said.
The country’s reserve position with the IMF decreased by $29 million to $4.937 billion in the reporting week.
Earlier in the day, RBI Governor Shaktikanta Das said that there was a real shortfall of currency supply in the market compared to demand due to import and service requirements of debt and portfolio outflows.
He said the central bank has provided US dollars to the market to ensure there is enough foreign exchange liquidity.
“After all, this is the very purpose for which we had accumulated reserves when capital inflows were strong. And, may I add, you buy an umbrella to use when it rains!” Das said.