The decline in the country's forex reserves has been seen after about 7 weeks. After about 3 months, such a huge decline has been seen in the country's foreign exchange reserves. While everyone was waiting for this, the country's forex reserve will cross the magical figure of 650 billion dollars this time.
The effect of the record fall in the rupee against the dollar is clearly visible in the country's foreign exchange reserves. There was a big decline in the country's foreign exchange reserves in a week. The special thing is that the decline in the country's forex reserves has been seen after about 7 weeks. After about 3 months, such a huge decline has been seen in the country's foreign exchange reserves.
While everyone was waiting for this, the country's forex reserve will cross the magical figure of 650 billion dollars this time. For which only one and a half billion dollars were required. But the circumstances were opposite. Let us also tell you what kind of figures have been presented by RBI regarding foreign exchange reserves.
decline in foreign exchange reserves
According to the information given by the Reserve Bank of India, the country's foreign exchange reserves decreased by $ 5.40 billion to $ 643.16 billion in the week ending April 12. In the last trading week, the country's foreign exchange reserves had increased by $ 2.88 billion and reached a new high of $ 648.56 billion. It was expected that the country's foreign exchange reserves would cross 650 billion dollars, but this could not happen. A continuous increase was seen in about 7 weeks. An increase of 32.5 billion dollars was also seen in the country's foreign exchange reserves. The surprising thing is that the biggest decline in foreign exchange reserves has been seen in 3 months.
Assets fell and gold reserves increased
According to the Reserve Bank of India data, in the week ending April 12, foreign currency assets, which are considered an important part of the currency reserves, have seen a decline of $ 6.51 billion and the total figure has come to $ 564.65 billion. Foreign currency assets quoted in dollar terms include the impact of movements in non-US currencies such as the euro, pound and yen held in foreign exchange reserves.
On the other hand, there has been an increase in gold reserves. The Reserve Bank said that during the week under review, the value of gold reserves increased by $ 1.24 billion to $ 55.79 billion. The Reserve Bank said that Special Drawing Rights (SDR) declined by $ 93 million to $ 18.08 billion. According to the Reserve Bank, India's reserve deposits with the International Monetary Fund (IMF) also declined by $35 million to $4.63 billion in the week under review.
Why did the decline occur?
The main reason for the decline in foreign exchange reserves is Middle East tension. The effect of which has been seen in the price of crude oil. During the period under review, the price of crude oil had gone above $90 per barrel. Due to which the import bill of the country has increased. Besides, a record fall in the rupee against the dollar was also seen. To reduce this fall in rupee, RBI started intervening in the currency market. Due to which there was a decline in gold reserves. When a fall in the rupee is seen, the RBI has to intervene in the currency market and take steps to reduce the fall of the rupee. This is the reason why foreign exchange reserves have declined.
What may lie ahead?
If experts are to be believed, the figures coming in the coming week may also be negative. In fact, the rupee may continue to fall against the dollar. Recently the tension in the Middle East has not reduced. There is a possibility of rise in crude oil prices. Because of which RBI may have to intervene in the currency market. On the other hand, the import bill is likely to increase. The effect of which can be seen in foreign exchange reserves. Besides, foreign investors withdrawing their money from the Indian market can also prove costly for the Forex reserves.
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