Data given by RBI showed that India's total forex reserves stood at $601.057 billion in the week ending June 3, 2022, down by $306 million compared to $601.363 billion in the previous week.
Meanwhile, foreign currency assets declined by $208 million in the week under review to $536.779 billion compared to $536.988 billion in the week ending May 27, 2022.
Further, gold reserves slipped by $74 million in the week ending June 3, to $40.843 billion compared to $40.917 billion in the week ending May 27 this year. Whereas the country's Special Drawing Rights (SDRs) stood at $18.410 billion lower by $28 million in the week ending June 3 against $18.438 billion of May 27 week.
On the other hand, the reserve position in IMF jumped $5 million to $5.025 billion in the week ending June 3 against $5.019 billion in the previous week.
India's forex reserves declined after two consecutive weekly rises. The reserves jumped by $3.854 billion to $601.363 billion in the week ending May 27, and the reserves climbed by $4.230 billion to $597.509 billion in the week ending May 20.
India's forex reserves have seen a volatile movement due to macroeconomic drawbacks this year. However, notably, the country is still among 12 major economies that merit the list of major trading partners for the United States.
The US Treasury Department released its latest report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners for the country, on June 10.
As per the US treasury department, India is on the 'Monitoring List' of major trading partners that merit close attention to their currency practices and macroeconomic policies.
Apart from India, other economies were China, Japan, Korea, Germany, Italy, Malaysia, Singapore, Thailand, Taiwan, Vietnam, and Mexico.
In the report, the US treasury department said, "The Administration has strongly advocated for our major trading partners to carefully calibrate policy tools to support a strong and sustainable global recovery. Treasury also continues to stress the importance of all economies publishing data related to external balances, foreign exchange reserves, and intervention in a timely and transparent fashion."
Talking about India's forex intervention, the US treasury dept's report explained that the country has been exemplary in publishing its foreign exchange market intervention, both monthly spot purchases and sales and net forward activity, with a two-month lag. RBI’s net purchases of foreign exchange reached $41 billion, or 1.3% of GDP, in 2021.
Further, the report stated that RBI intervenes frequently in both directions, and in 2021 the RBI purchased foreign exchange on the net in 7 of 12 months. The RBI made large monthly purchases in January and February of 2021, followed by modest sales in the spring as a COVID-19 outbreak took hold. Net purchases ticked back up during the summer but tapered off as the rupee came under greater depreciation pressure against the U.S. dollar in the latter part of 2021.
"RBI foreign exchange purchases in recent years have resulted in an elevated level of reserves," the report added.
Notably, the US treasury dept report points out that India has the fourth largest in terms of forex reserves at $569.9 billion as of December 2021, 18% of GDP.
India follows Switzerland which holds the third rank in terms of forex reserves at $1,033.8 billion, and Japan which has the second-largest forex reserves at $1,283.3 billion. Meanwhile, China is at the top spot with forex reserves of $3,250.2 billion as of December 2021.
With forex reserves of $601.057 billion as of June 3, India continues to hold the fourth rank following Switzerland, Japan, and China.
On Friday, the Indian rupee settled at a new historic low of 77.85 (provisional) against the US dollar at the interbank forex market, due to selling pressure in domestic equities and strong green against a basket of currencies that dampened sentiments.
On the rupee performance, Jateen Trivedi, VP Research Analyst at LKP Securities said, "Rupee traded weak by 0.08 points at 77.85 compared to 77.77 down 0.10% inching closer to 78.00 on back of strong dollar prices after China lockdown restriction raised yet again, sending commodity prices lower and dollar prices higher. The rupee felt the pressure as dollar prices trade above $103.50 & Crude prices holding above $120 in both Brent & Nymex."
Going forward, Trivedi said, "The rupee can be seen in a range of 77.75-78.00 given the current situation, Core CPI data of the US will give further cues for the range on rupee and dollar index."
https://www.livemint.com/news/india/indias-forex-reserves-decline-to-601-billion-after-two-consecutive-weekly-rise-11654941077639.html
2022-06-11 10:00:03Z
CAIiECHW08iBmmCHYKriPfqjZBcqFwgEKg4IACoGCAowxLQ_MNevCDCyrdsG
Bagikan Berita Ini
0 Response to "India's forex reserves decline to $601 billion after two consecutive weekly rise | Mint - Mint"
Post a Comment