Investing.com — India's foreign exchange reserves have been on the decline for six consecutive weeks, standing at a 10-month low of $625.87 billion as of January 10, according to data from the Reserve Bank of India (NS:) (RBI). This marks a drop of $8.72 billion in just one week, the most significant drop seen in two months.
Stocks have seen a steep fall of $23.5 billion over the past five weeks. Compared to their high of $704.89 billion at the end of September, reserves fell by $79 billion. The change in foreign currency assets can be attributed to RBI's intervention in the forex market and the fluctuating value of foreign assets held in reserves.
The RBI has been actively intervening in the forex market to prevent the rupee's high volatility. Despite these efforts, the Indian currency has been facing continued challenges due to the strengthening of the US dollar and weak capital flows in recent weeks. However, the central bank's regular intervention through state-owned banks helped limit the rupee's losses.
In the week of January 10, the rupee hit a record low of 85.97, marking its tenth consecutive weekly loss. Among these world powers, the RBI is expected to be more cautious in using its foreign exchange reserves to manage volatility in the domestic currency market.
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