Forex reserves down for third straight week at $572 billion

On Friday, the rupee fell by 5 paise to close at 79.90 against the US dollar. It had touched an all-time intra-day low of 80.06 against the US dollar on Thursday.

During the reporting week ended July 15, the fall in the reserves was on account of a decline in the Foreign Currency Assets (FCAs), a major component of the overall reserves, and also in the gold reserves, the central bank said.

FCAs fell by USD 6.527 billion to USD 511.562 billion in the reporting week, according to the Weekly Statistical Supplement released by RBI.

Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves decreased by USD 830 million to USD 38.356 billion in the reporting week.

‘Indian Rupee is holding up well relative to advanced and emerging market peers’: RBI Governor

Indian economy is relatively better placed amid grim global scenario, said the Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday, adding that the domestic currency rupee is holding up well relative to advanced and emerging market (EM) peers.

The Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) declined by USD 155 million to USD 17.857 billion, RBI said.

The country’s reserve position with the IMF decreased by USD 29 million to USD 4.937 billion in the reporting week.

Earlier in the day, the RBI Governor Shaktikanta Das said there was a genuine shortfall of supply of foreign exchange in the market relative to demand because of import and debt servicing requirements and portfolio outflows.

He said the central bank has been supplying US dollars to the market to ensure that there is adequate foreign exchange liquidity.

“After all, this is the very purpose for which we had accumulated reserves when the capital inflows were strong. And, may I add, you buy an umbrella to use it when it rains!,” Das said.