India's foreign exchange reserves decline $4.6 billion to $596 billion

 

India’s foreign exchange reserves declined by $4.6 billion ( decline in foreign currency assets $4.5 billion) to $596 billion. Since February a decline of $36 billion was seen. The central bank has been aggressively intervening in the foreign exchange market for the last few months. RBI has been selling dollars to curb any rapid depreciation of the rupee. 

Emerging market currencies under pressure since the start of the war in Ukraine in late February as investors rush for safe-haven assets. The rupee has declined close to 5 per cent against the dollar in 2022.The current level of foreign reserves is enough for less than 10 months of imports projected for 2022-23.

Volatility in the exchange rate remains, given the ways central banks are approaching inflation. RBI tries to curb the volatility in the rate. The rupee is anticipated to hit 79 against a dollar by the end of the month.

The rupee, which breached the 78-mark against the dollar for the first time earlier this week, continues to trade at that level.