Forex reserves contract by $325 million to $560.94 billion in week ended Feb 24

The steep decline for the fourth consecutive week can mainly be attributed to a drop in RBI’s foreign currency assets, which plunged by $166 million to $495.91 billion during the preceding week.

During the week ending February 24th, the Indian rupee appreciated by 0.1 percent against the US dollar, settling at a rate of 82.75 per US dollar.

After experiencing significant increases in November and December, the Reserve Bank of India's foreign exchange reserve has been decreasing in recent weeks, primarily due to concerns about potential rate hikes by the US Federal Reserve and the resulting strengthening of the US dollar on a global scale.

According to the February Bulletin released by the Reserve Bank of India (RBI), the foreign exchange reserves were valued at $576.8 billion as of January 27th.

During the period from June to October 2022, the Reserve Bank of India (RBI) sold more US dollars than it purchased in the currency market.

This move was aimed at preventing excessive volatility in the exchange rate of the Indian rupee due to factors such as the ongoing conflict in Ukraine and the aggressive rate hikes by the US Federal Reserve. Thus, the RBI acted as a net seller of US dollars during this period.

The foreign exchange reserves of the Reserve Bank of India (RBI) increased by $28.9 billion from the end of September, reaching $561.6 billion.