Reserve Bank of India: India’s foreign exchange reserves fall by $3 billion in the week ending August 26

India’s foreign exchange reserves fell by $3 billion in the week ending August 26 as the Reserve Bank of India continued to dip into its reserves to stave off the rupee’s slide.

Reserves stood at $561.046 billion, ahead of the US symposium in Jackson Hole which was held on August 26 and saw Fed Chairman Jerome Powell make hawkish comments about fighting inflation.

India has lost about $45 billion in reserves since April, but the pace of the fall has slowed, according to RBI data.

Portfolio investors have sold Indian assets worth more than $7 billion this fiscal year on a net basis so far, despite being net buyers for two consecutive months. In August, foreign portfolio investors injected about $7.6 billion in Indian stocks and debt.

There is moderation, however, in the event of non-portfolio capital flows such as external commercial borrowing and NRI deposits – both could remain below trend in FY23 amid rising rates and rising weakening of the national currency, according to QuantEco Research.

Of the total reserves, foreign currency assets amounted to $498.645 billion while gold reserves held were valued at $39.643 billion. The balance is kept with the International Monetary Fund in the form of special drawing rights and reserves.