India’s forex reserves fell for two successive weeks after the value of its gold and euro assets declined after the prices of gold and euro plunged.
The reserves decreased $274 million in the week ending May 30 to stand at $312.383 billion, reported the Reserve Bank of India. The reserves lost $2.269 billion in the week through May 23. Foreign currency assets shed $269.3 million to stabilize at $285.292 billion.
“The dip may be a reflection of change in valuation of other basket of currencies and gold held as reserves,” KN Dey, a senior exchange consultant, told Economic Times.
The euro touched its lowest level in four months versus the US dollar after the European Central Bank announced a raft of stimulus measures such as negative deposit rates on Thursday. The currency has declined by 3 percent from a high of $1.4000 immediately after the ECB Chief Mario Draghi hinted at possible easing policies in early May.
The ECB slashed the deposit rate to -0.10 percent from 0 percent and lowered the key lending rate from 0.25 percent to 0.15 percent.
The RBI’s forex reserves include gold, foreign currencies, foreign currency assets denominated in dollars. Recently, global gold prices have declined due to weak demand.
Separately, Philippines’ gross international reserves rose to $79.957 billion last month from April, reported Bangko Sentral ng Pilipinas on Thursday.
“The increase in reserves was due mainly to the foreign exchange operations of the BSP and the net foreign currency deposits by the Treasurer of the Philippines, the central bank said.“These inflows were partially offset by the revaluation adjustments on the BSP’s gold holdings and payments for maturing foreign exchange obligations of the national government.”
The GIR shows whether a country can meet its foreign obligations and pay for imports. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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