India's Foreign Exchange Reserves Take a Hit

India's foreign exchange reserves have dropped significantly, reaching a near six-month low of $652.87 billion as of December 13, according to the Reserve Bank of India (RBI). This decline marks a $2 billion decrease from the previous week and a stark contrast to the record high of $704.89 billion achieved on September 27.

The fluctuations in foreign currency assets are largely attributed to the RBI's interventions in the forex market and the changes in the value of foreign assets held in reserves. The central bank actively manages the market to prevent excessive volatility in the rupee's value.

The rupee has also faced pressure, reaching an all-time low of 84.88 last week due to a weak yuan and strong dollar bids in the non-deliverable forwards market. The currency's decline has been persistent, ending at 85.0150 on Friday, marking a seventh consecutive week of losses.

The forex reserves also encompass India's reserve tranche position in the International Monetary Fund, adding another layer to the complex dynamics influencing these figures.