MUMBAI: The nation’s forex reserves have seen the sharpest weekly dip on record, losing a whopping USD 17.76 billion for the week to November 15 as the dollar continued to rally leading to tremendous pressure on the rupee, which forced the Reserve Bank to sell the greenback to stem the slide.
The reserves have fallen by a total of nearly USD 30 billion in the past seven weeks and are down by USD 47 billion from the record high of USD 704.89 billion hit on the week to September 27. Still, on an annualised basis, the reserves are up by $5.95 billion.
During the reporting week, the rupee fell to its then-record low of 84.4125 against the dollar. In the following week, the unit continued its downward spiral crossing the sensitive 84.5 mark on Thursday. However, on the back a 2 per cent rally in the equity markets, the currency settled at 84.4450 Friday, after hitting an all-time low of 84.5075 earlier in the session.
The reserves are down the most since 1998 when the data are available to $657.89 billion, losing a whopping USD 17.76 billion, according to the data released by the Reserve Bank of India on Friday.
The rupee has been under pressure ever since Donald Trump made a solid comeback after the US elections on November 5. This has forced the RBI to sold dollars from its reserves to limit the slide. Of the total reserves, the foreign currency assets, which are the largest component, fell by USD 15,54 billion, and this was caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves. Analysts said there was also a revaluation loss for the reporting week which is estimated at USD 10.4 billion, while the RBI may have net sold dollars worth USD 7.2 billion in the week to November 15.