India's Foreign Exchange Reserves Decline After Three-Week Surge

New Delhi, Aug 3 (KNN) In a reversal of recent trends, India's foreign exchange reserves decreased by USD 3.5 billion to USD 667.39 billion for the week ending July 26, according to data released by the Reserve Bank of India (RBI) on Friday.

This marks the most significant weekly decline in over three months and interrupts a three-week period of consecutive gains.

The reserves had previously reached a record high of USD 670.86 billion in the week concluded on July 19, following a cumulative increase of USD 18.9 billion over the preceding three weeks.

The RBI, which intervenes in the foreign exchange market to manage excessive rupee volatility, influences these reserve fluctuations through its market operations.

Changes in foreign currency assets, a major component of the reserves, reflect both RBI interventions and variations in the valuation of foreign-held assets.

During the week in question, the Indian rupee faced downward pressure, reaching new all-time lows amid outflows from domestic equity markets.

By Friday, the currency had settled at 83.75 against the US dollar, its weakest closing level to date, after touching an intraday record low of 83.7525. Week-on-week, the rupee remained relatively stable.

It is worth noting that India's foreign exchange reserves also include its reserve tranche position in the International Monetary Fund.

(KNN Bureau)