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The fall in the foreign exchange reserves can be attributed to a fall in the Foreign Currency Assets (FCA), which is a significant component of the overall reserves, according to the Weekly Statistical Supplement released by RBI
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India's foreign exchange reserves fell to the lowest level since July 2020 and stood at USD 524.52 billion in the week through 21 October, RBI data showed on Friday.
This was the week when the rupee hit its record low at 83.29 against the US dollar.
The fall can be attributed to a fall in the Foreign Currency Assets (FCA), a significant component of the overall reserves.
To help arrest the rupee's fall, the RBI has now burned about USD 118 billion from its forex kitty. The RBI has, however, attributed about two-thirds of the decline to valuation effects.
Traders speaking to news agency Reuters said the RBI had intervened in both the spot and forward markets to contain the slide.
Foreign currency assets dropped USD 3.59 billion to USD 465.08 billion for the week ended 21 October. Gold reserves fell USD 247 million to USD 37.21 billion.
The reserves stood at USD 529.37 billion for the week that ended 14 October.
The forex reserves have now depleted for 11out of 12 weeks. Gains in gold reserves had lifted the reserves by USD 204 million in the week ended 7 October.
The rupee ended 0.25 per cent higher at 82.47 per dollar in the week ended 28 October, ending a run of six straight weeks of declines.