India’s Forex Reserves Fall for Fourth Week to $734.6 Billion

India’s foreign exchange reserves fell for the fourth consecutive week to $734.6 billion, according to data cited by the Reserve Bank of India (RBI). The reserves are now around $50 billion below their recent peak of $785.71 billion recorded on September 4.

The decline comes as the RBI has been selling dollars in the spot market to limit the rupee’s depreciation. The central bank has also used sell/buy foreign exchange swaps to absorb excess liquidity in the financial system.

Despite these measures, the rupee remains under pressure from high oil prices, rising US Treasury yields and increased foreign equity outflows. On Wednesday, the rupee weakened nearly 0.5% to 96.8450 per dollar, moving closer to its record low of 96.96.

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