India’s foreign exchange reserves fell for the fifth consecutive week, falling $2.675 billion to $682.130 billion in the week ended November 1, according to RBI data. The record reserves of $704.885 billion are slowly dwindling, likely due to RBI intervention to support the rupee.
Recent reserve declines that peaked last month included $3.7 billion, $10.7 billion, $2.16 billion and $3.463 billion in recent weeks. Current foreign reserves, including foreign currency assets (US$589.849 billion) and gold reserves (69.751 billion USD) was enough to cover about one year of projected imports.
While the RBI intervened to maintain market stability without a specific exchange rate target, it has historically managed the exchange rate by buying dollars when the rupee was stronger and sales when it was weak. This move has helped reduce volatility in the rupee, making it one of Asia’s most stable currencies and making India more attractive to foreign investors.
