India s forex reserves at 20 month low

India s foreign currency reserves fell by $7.5bn to $572bn during the week ended July 15_ according to data released by the Reserve Bank of India (RBI).

The country's reserves fell to a 20-month low following heavy intervention by the central bank in the forex market as it sold dollars to prevent a sharp depreciation of the local currency.

The Indian forex reserves were last at $572bn in November 2020. Since then_ they had risen to a high of $642bn in October last year. The RBI is believed to have sold over $50bn to stem the volatility in the forex market.

In the interbank foreign exchange market_ the rupee closed at 79.85 as against the greenback_ 10 paise stronger than Thursday s close of 79.95. The rupee firmed up even as foreign institutional investors were net sellers in the equity market on Friday.

The dollar index_ which measures the greenback s strength against a basket of six currencies_ was up 0.2 per cent at 107.1.

Former chief statistician of India Pronab Sen told_  It is more of a story of the dollar strengthening than the rupee weakening.