India's foreign exchange reserves have declined for the fourth consecutive week, now standing at $734.6 billion. This drop follows a peak of $785.71 billion on September 4, marking a significant decrease of approximately $50 billion in less than a month.
Current Situation
The decline in reserves is attributed to the Reserve Bank of India (RBI)'s interventions in the currency market. According to a footnote in a statement by RBI Governor Sanjay Malhotra, the central bank has been selling dollars in the spot market to stabilize the rupee's value. Additionally, the RBI has engaged in sell/buy FX swaps to manage surplus liquidity.
