India’s forex kitty falls for 5th week in a row

Mumbai: India’s foreign exchange reserves fell for a fifth consecutive week to settle at a five-month low of $584.74 billion as of October 6, figures compiled by the RBI showed on Friday.

The $2.17 billion decline from the previous week came on top of a close to $12 billion drop in the preceding four weeks.

The RBI intervenes in the spot and forwards markets by releasing more dollars to prevent the rupee from going into a free fall when it comes under pressure due to the increased demand for dollars amid rising oil prices.

Any sharp decline in the country’s forex kitty also leads the RBI less headroom to intervene in the market to stabilise the rupee.

The rupee ended at 83.2625 on Friday, down for a third consecutive week.