India’s Foreign Exchange Reserves down $2.06 billion

India’s foreign exchange reserves decreased by $2.06 billion to $335.72 billion for the week ended March 13, Reserve Bank of India (RBI) data showed. According to analysts, the Indian reserves fell on the back of a rally in the US dollar and that major non-dollar currencies were trading at their weekly lows. The Indian reserves hold nearly 20-25 percent of the non-dollar currencies.

“The fall in foreign reserves can be attributed to a sharp rally in the US dollar. This had an effect on the major non-dollar currencies which were trading to their weekly lows,” Anindya Banerjee, senior manager, currency derivatives, Kotak Securities told.

For the previous week ended March 6, the reserves had decreased by $286.3 million to $337.79 billion. However, for the week ended Feb 27, the total forex reserves had increased by $3.88 billion to $338.07 billion.

According to the RBI’s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves declined by $1.97 billion at $310.34 billion in the week under review. The foreign currency assets had risen by $122.4 million at $312.32 billion in the week ended March 6. For the week ended Feb 27, the foreign currency assets had increased by $3.90 billion at $312.20 billion.

The RBI said the foreign currency assets, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve. India’s reserve position with the International Monetary Fund (IMF) in the week ended March 13 decreased by $27.1 million and stood at $1.58 billion.

The value of special drawing rights (SDRs) was lower by $60.8 million in the week under review at $3.96 billion. Gold reserves were static at $19.83 billion. The gold reserves had plunged by $346.2 million in the week ended March 6. (IANS)