Forex Reserves Decline for the Sixth Consecutive Week

MUMBAI: As of January 10, India's forex reserves have plummeted to a 10-month low of $625.9 billion, marking a significant decline of $8.7 billion in just one week and a staggering $23.5 billion over five weeks. This downturn, which represents a $79 billion drop from the all-time high of $704.9 billion recorded in late September, is attributed to the Reserve Bank of India's (RBI) dollar sales and the depreciation of non-dollar holdings as the US dollar strengthens globally.

Rupee Faces Pressure Amidst Strong Dollar and Foreign Investor Exodus

On Friday, the rupee experienced its steepest weekly drop in 18 months, settling at 86.61 against the dollar. This decline is largely due to the pressure exerted by a robust US dollar and the withdrawal of foreign investors. In response to these challenges, dealers are speculating that the RBI might consider engaging in forex swaps to bolster reserves and enhance rupee liquidity.