After a 4-week decline, the Indian forex kitty swells by $2.4 billion
After falling for four weeks, India’s foreign exchange reserves finally added $2.4 billion in the week ended July 29 as overseas portfolio investors began to show some confidence in Indian markets. after a long time.
The gains in the forex pool were mainly supported by robust capital inflows and the weakening of the rupee to net gains of 80 to the dollar at below 79. This marks the highest foreign exchange reserves in three weeks and interrupts a four-week downtrend.
The Reserve Bank of India has been burning the country’s foreign exchange reserves in its attempt to shore up the rupee by selling dollars in the spot and forward market, especially since Russia invaded Ukraine and the rupee has fallen. crashed to 77 per dollar for the first time and launched lower to break through the 80 mark against the greenback, its historically low level.
Many Asian central banks have used foreign exchange reserves to defend their respective currencies. India, Thailand and Korea have seen their reserves plummet by $115 billion this year as they sold dollars to stem currency declines, according to Bloomberg News.
“They are simultaneously facing a rapid tightening of external financial conditions, capital outflows, currency depreciations and loss of reserves. Some of them are also facing a growing burden of debt and defaults,” the governor said.