India’s Forex Reserves Decline due to Weaker Rupee

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India’s Forex Reserves Decline due to Weaker RupeeIndia’s forex reserves dropped for the fifth consecutive week, plunging $2.755 billion to $311.427 billion, in the week through Oct. 3.

The Reserve Bank of India reported that foreign currency assets, which form a large proportion of the reserves, dropped $1.804 billion to $285.589 billion. Gold reserves dropped $920 million to $20.013 billion.

The country’s special drawing rights fell to $22.8 million to $4.284 billion, while its reserve position at the International Monetary Fund (IMF).

The prior week through September 26, the forex reserves dropped $1.41 billion to $314.18 billion. The weakening rupee has seen the reserves drop by around $7.2 billion over the past five weeks.

The rupee has taken a beating against the U.S. dollar due to speculation over the pace of U.S. quantitative easing measures.

Meanwhile, Pakistan’s foreign exchange reserves grew to $13.4 billion in the week through Oct. 3, up from $13.210 billion a week earlier. The State Bank of Pakistan reported that forex reserves held by the state rose to $8.857 billion in the week ending Oct. 3, compared with $8.609 billion the previous week.

However, the reserves held by commercial banks fell to $4.543 billion from $4.601 billion a week earlier, reported Reuters.

Over the period, the State Bank of Pakistan also received a total of $484 million from bilateral, multilateral and other institutions, including $364 million from the Coalition Support Fund (CSF).

The central bank paid out a total of $133 million with regards to external debt servicing and official payments. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com