Rupees Free-Fall Led To Decline Of India's Forex By $25.147 Billion

The rupee's free-fall since the beginning of this calendar year has resulted in country's forex reserves falling by $25.147 billion for the period between April 13 and August 10 as several of the times RBI has been forced to intervene to stabilize the domestic currency.

As per the latest RBI data released, the reserves have plunged by a sharp $1.822 billion within a week's time to the low of $400.88 billion in the week to August 10. RBI has been constantly engaged in selling of the dollar currency to defend the local rupee.

The sharp reduction in foreign reserves is primarily being attributed to a steep decline in foreign currency assets. In the reporting week, the FCAs plunged sharply by $1.949 billion to $376.265 billion. Expressed in US dollar terms, foreign currency assets include the effect of appreciation/depreciation of the non-US currencies such as the euro, pound and the yen held in the reserves.

On the other hand, gold reserves saw an increase by $145.6 million to $20.691 billion.

The special drawing rights with the International Monetary Fund (IMF) dipped by $9.2 million to $1.466 billion. The country's reserve position with the IMF also declined by $9.2 million to $2.458 billion, the apex bank said.

Rupee since the beginning of the year has fallen by more than 9% and has been the worst Asian currency. Earlier on Thursday, the rupee touched an all time-low of 70.40 and also it made a historic close at 70.15 .

The RBI has been heavily intervening in the forex market and has in net sold dollars worth $14.434 billion in the 3 months time from April to August in the spot market.

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