After rising for five weeks the Reserve Bank of India (RBI)’s foreign exchange reserves fell by $286.3 million to $337.79 billion in the week ended March 6, show data released on Friday.
Foreign currency assets, a key component, rose by $122.4 million to $312.32 billion. During the week, gold reserves fell $346.2 million to $19.84 billion.
Special Drawing Rights fell by $44.6 million to $4.02 billion, while India’s reserve position with the International Monetary Fund was down $17.9 million to $1.61 billion.
Meanwhile, on Friday the rupee ended near a level earlier seen on January 7. The rupee touched the 63 mark in intra-day trades before closing at 62.97, compared with the previous close of 62.51. The rupee had ended at 63.18 a dollar on January 7.
“It weakened on likely RBI intervention. RBI apparently bought dollars in the spot market and might have picked up close to $800 million through intervention. Sources speculate that expecting a more hawkish tone from the US Fed, the central bank could be shoring up dollars,” said Suresh Nair, director, Admisi Forex India.
Currency dealers believe the weakness in rupee might continue even next week.