Forex reserves fall for second straight week

24/10/2016 13:41

The country’s foreign exchange reserves fell for a second straight week amid a decline in foreign currency assets, data from the Reserve Bank of India (RBI) showed.

Foreign exchange reserves dropped by USD 1.506 billion to USD 366.139 billion in the week to October 14, 2016.

In the week ended October 7, 2016, forex reserves had fallen by a whopping USD 4.343 billion to USD 367.646 billion.

Foreign currency assets, which are expressed in dollar terms and include the effect of appreciation or depreciation of non US currencies such as euro, pound and yen held in reserves, fell by USD 1.486 billion to USD 340.908 billion in the week ended October 14, 2016, from the previous week, the RBI added.

Foreign currency assets are the biggest component of the overall forex reserves.

India’s gold reserves stood unchanged at USD 21.406 billion in the week ended October 14, 2016 from the previous week, data showed.

The Foreign Currency Non-Resident (FCNR) Bank redemptions worth USD 26 billion are probably putting pressure on the country’s foreign exchange reserves kitty.

Robust forex reserves may help support the local currency in the wake of heightened global uncertainties amid US interest rate hike fears, US Presidential elections and Brexit jitters.

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