India's forex reserves halt 7-week rising streak, come off record high

The currency settled at 84.06 on Friday, after hitting a record low of 84.07 in intraday trade. It was down 0.1% week-on-week.

India's foreign exchange reserves fell for the first time in eight weeks and came off a record high to stand at $701.18 billion as of October 4, data from the Reserve Bank of India (RBI) showed on Friday.

The reserves fell by $3.71 billion in the reporting week, after having risen by a total of nearly $35 billion in the prior seven weeks.

They had hit a record high of $704.89 billion and had risen by $12.6 billion in the week ending September 27 in their biggest weekly increase since mid-July 2023.

Changes in foreign currency assets are caused by the central bank's intervention in the foreign exchange market as well as the appreciation or depreciation of foreign assets held in the reserves.

The RBI intervenes on both sides of the forex market to prevent undue volatility in the rupee.

Forex reserves also include India's reserve tranche position in the International Monetary Fund.

In the period for which the forex reserves data pertains, the rupee had logged its worst week since May and had slipped 0.3% week-on-week, as equity outflows surged and crude oil prices rose due to a worsening of the Middle East conflict.

The RBI had intervened in both the non-deliverable forwards and local spot forex market to help the rupee stay above the psychologically important 84 mark, traders said.

The currency settled at 84.06 on Friday, after hitting a record low of 84.07 in intraday trade. It was down 0.1% week-on-week.