Covid19 Effect: India's Forex Reserves Post Biggest Weekly Fall Since 2008

In the week ended March 20, 2020, the country's forex reserves declined the most since 2008 global financial crisis by a staggering USD 11.98 billion to USD 469.909. This comes as the Reserve Bank of India continued to flush dollars into the market for curbing further depreciation in the rupee. On March 23, rupee dropped below 76 mark against the US dollar as FIIs continued to sell in the Indian domestic and debt market as uncertainty looms on account of Covid 19.

India's Forex Reserves Post Biggest Weekly Fall Since 2008 Financial Crisis

In the earlier week also the country's forex reserves declined by as much as USD 5.346 billion to USD 481.89 billion. This was the first fall in the country's forex reserves in six months time.

The last time during the week ended October 24, 2020, forex reserves declined by $15 billion.

In the week ended March 6, 2020, the reserves scaled to a life-time high of USD 487.23 billion, jumping USD 5.69 billlion.

For the period under review, the foreign currency assets (FCA), which is one of the top constituent of the total forex reserves, fell to USD 437.102 billion, after dipping by USD 10.256 billion.

During the week to March 20, the foreign currency assets (FCA), a major component of the overall reserves, declined by USD 10.256 billion to USD 437.102 billion.

Also, gold reserves which were recording a rise for the past several weeks, registered a fall of USD 1.610 billion to USD 27.856 billion as per the RBI data. The special drawing rights with the International Monetary Fund (IMF) fell by USD 40 million to USD 1.409 billion. Also, the reserve position of the country with the IMF dropped by USD 77 million to USD 3.542 billion.

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