India’s forex reserves fall by $11.17 bn in sharpest ever weekly drop: Report

India’s foreign exchange reserves fell by $11.17 billion for the week ending April 1 – the sharpest ever weekly drop – to settle at $606.475 billion, news agency PTI reported Saturday citing Reserve Bank of India data.

The fall has been attributed to pressure on the Indian rupee as a result of the conflict in Ukraine, the continuing impact of the Covid pandemic, and other geopolitical developments.

The value of gold reserves also fell – by $507 million to $42.734 billion, RBI data showed.

For the previous week – ending March 25 – reserves slid by $2.03 billion to $617.648 billion. The previous worst weekly fall was of $9.6 billion for the week ending March 11.

This is the fourth consecutive week of decline in forex reserves as the RBI intervenes in the currency markets by way of dollar sales to prevent a slide in value of the rupee amid the Ukraine conflict.

Forex reserves have declined by over $26 billion in the past four weeks for which data is available.

The steep fall last week was due to decline in core currency assets, which fell by $10.727 billion to $539.727 billion. Expressed in dollar terms, 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 RBI on Friday issued its first monetary policy for FY 2022/23, in which it held key lending rates unchanged; the repo rate is four per cent and the reverse repo rate is 3.35 per cent.

RBI governor Shaktikanta Das said the six-member Monetary Policy Committee voted unanimously to leave the rates unchanged and keep the central bank’s stance ‘accommodative’.

Das also said India’s projected real GDP is expected to be 7.2 per cent and quarterly inflation projections are 6.3 per cent in Q1, 5 per cent in Q2, 5.4 per cent in Q3 and 5.1 per cent in Q4.