India’s foreign exchange: There is a sharp decrease in the foreign exchange reserves of the country. Within the last 8 days, the foreign exchange reserves have decreased by about $ 8 billion and it is the lowest level since August 2020. At the same time, there has been a decrease of about $100 billion in foreign exchange reserves in the last one year. The total forex reserves declined to US$ 537.518 billion for the week ended September 23. These figures have been released by RBI. This is the eighth consecutive week that forex reserves have shown a decline.
The reason for the decrease in the country’s foreign exchange reserves is the decline in Foreign Currency Asset (FCA). Foreign currency assets declined by $7.688 billion for the week ended September 23 and came down to $477.212 billion. Foreign currency assets held in foreign exchange reserves, expressed in dollars, include the effects of appreciation or depreciation in non-US currencies such as the euro, pound and yen.
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Reserve Bank of India Governor Shaktikanta Das has said that due to the strengthening of the US currency and the rise in US bond yields, there has been a change in the exchange rate. The rupee has depreciated significantly against the US dollar in the current financial year. The forex reserves stood at US$ 606.475 billion as on April 2. On 23 September, it declined to US$ 537.5.
The forex reserves stood at US$ 642.45 billion on 3rd September 2021 last year and were at their all-time high. But on 23 September 2022, it has come down to $537.52 billion. These figures clearly show that a shortfall of about US$ 105 billion has been seen in India’s foreign exchange reserves in the last one year. Since Russia invaded Ukraine, foreign exchange reserves have seen a decrease of US$94 billion.
The rupee has depreciated 8.6 percent against the dollar in the current fiscal so far. In the current financial year till September 28, the US dollar has gained 14.5 percent against six major currencies. Forex reserves are at their lowest level since August 2020.