India's Forex Reserves Fall For the Fourth Consecutive Week

For the fourth consecutive week, India's forex reserves have witnessed a downtrend as per the RBI data released which for the week to May 11, 2018, reported forex reserves lower by $1.2 billion to $417.7 billion.

On April 13, 2018, forex reserves had hit a record high of $426 billion.

The decline in the country's forex reserves is owed to the dollar sell-off by PSU banks on behalf of the central bank which is suspected to intervene to curb the free-fall of rupee which has moved past the 68-mark against the dollar this week for the first time since January 2017.

Rupee on Friday ended the day lower by 0.45% at 68.01 a dollar in comparison to its previous close of 67.70.

Additionally, the reserves have been falling due to the revaluation impact of the FCA or foreign currency assets, which form a substantial component of India's forex.

The depreciating rupee due to the rising crude oil price which has increased over US$ 80 a barrel for the first time since 2014 and political instability after the conclusion of key Karnataka elections has resulted in huge foreign outflow from both domestic equity and bond markets.

Foreign investors have so far bought and sold bought $660.20 million and $3.47 billion in equity and debt markets respectively.

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