India's forex reserves dip by $9.64 billion, the biggest drop in 2 years

India's foreign exchange (forex) reserves declined by $9.646 billion to $622.275 billion in the week ended March 11. 

New Delhi: India's foreign exchange (forex) reserves declined by $9.646 billion to $622.275 billion in the week ended March 11, the sharpest decline in nearly two years, as the Reserve Bank of India (RBI) heavily sold dollars to prevent the slide in the value of rupee.

According to the RBI`s weekly statistical supplement, the foreign currency assets, which is the biggest component of the forex reserves, slumped by $11.108 billion to $554.359 billion during the week under review.

Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-dollar currencies like Euro, UK`s Pound Sterling and Japanese Yen held in the foreign exchange reserves.

This sharp decline in the country`s foreign currency assets coincides with the week during which the rupee hit an all-time low. The Indian rupee plunged to a record low of 77.02 against a US dollar on March 7.

According to the market analysts, the RBI intervened in the currency markets by selling dollars. The central bank is estimated to have sold $1 billion a day during the week to prevent further weakness in the Indian currency.