NEW DELHI: India’s foreign exchange reserves declined by $1.7 billion to $652 billion, in the week ending June 28, coinciding with the inclusion of the country’s debt in JPMorgan’s emerging market index, as per the recent data released by the Reserve Bank of India.
Forex reserves reached a record high of $655.82 billion on June 7 this year after an increase of $4.3 billion.
Foreign currency assets which is a major component of the reserves, fell by $1.252 billion to $572.881 billion.
Meanwhile, gold reserves dip by $427 million to $56.53 billion, whereas special drawing rights (SDRs) fell by $35 million to $18.01 billion. Reserve position in the IMF was up by $1 million to $4.57 billion.
The changes in foreign currency assets are influenced by the central bank’s intervention and the appreciation or depreciation of foreign assets held in the reserves. RBI also actively involves in the foreign exchange market to manage excessive fluctuations in the rupee’s value.
Additionally, India’s reserve tranche position in the International Monetary Fund contributes to the overall foreign exchange reserves.
Despite indications from foreign exchange market indicators suggesting inflows, primarily due to passive funds purchasing bonds following the inclusion in JPMorgan’s emerging market index, various market players observed that the actual volume of inflows was significantly lower than expected.
The rupee closed at 83.4850 on Friday, marking a 0.1% decrease for the week.
