In October 2021, India’s forex kitty had reached an all-time high of $645 billion.
Gold reserves were up by $1.268 billion to $43.575 billion during the week; special drawing rights were up by $72 million to $17.995 billion
After multiple weeks of decline, India’s forex reserves increased by $1.153 billion to $585.895 billion during the week ended October 13, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped by $2.166 billion to $584.742 billion.
In October 2021, the country’s forex kitty reached an all-time high of $645 billion. The reserves took a hit as the central bank deployed the reserves to defend the rupee amid pressures caused majorly by global developments since last year.
For the week ended October 13, the foreign currency assets, a major component of the reserves, decreased by $178 million to $519.351 billion, according to the Weekly Statistical Supplement released by the RBI.
Expressed in dollar terms, the 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.
Gold reserves were up by USD 1.268 billion to USD 43.575 billion during the week, the RBI said. The special drawing rights (SDRs) were up by USD 72 million to USD 17.995 billion, the apex bank said.
India’s reserve position with the IMF was down by USD 8 million to USD 4.975 billion in the reporting week, the apex bank data showed.
Rupee This Week
The rupee remained in the range of 83.21 to 83.28 for the entire week except on Friday when it rose to 83.04 before closing 83.1325. The Dollar Index remained strong near to 106.23 while US 10-year yields rose to 4.95 per cent, almost touching 5 per cent.
During the week Powell spoke on Thursday hawkishly and overall the data from the US has been good to keep the dollar well bid against all assets except gold and oil. Gold and oil rallied due to the middle East tensions.
Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP, said, “The rupee is expected to remain weak with RBI determining its direction/stability in the coming week. European and Asian currencies are weak, the middle East Tension continues with the possibility of it spreading into Arab Nations. It’s a wait-and-watch situation for the next week.”
