India's foreign exchange reserves decline to $578.45bn

Mumbai: India's foreign exchange reserves fell to $578.45 billion as of March 31, down from $SD 578.78 billion a week earlier, according to the Reserve Bank of India's Weekly Statistical Supplement released on Friday.

During the prior week that ended on March 24, they rose sharply $5.977 billion to $578.778 billion, hitting an over eight-month high. According to RBI's latest data, India's foreign currency assets, the biggest component of the forex reserves, fell by $4.38 billion to $509.691 billion.

Gold reserves during the latest week fell by $279 million to $45.200 billion.

At the beginning of 2022, the overall forex reserves were at about $633 billion. Much of the decline can be attributed to RBI's recent intervention and a rise in the cost of imported goods.

In October 2021, the country's foreign exchange reserves touched an all-time high of about $645 billion. Earlier, the forex reserves had been intermittently falling for months largely because of the RBI's intervention in the market to defend the depreciating rupee against a surging US dollar.

Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.