Indian forex reserves fell by $2 billion this month as the central bank sold dollars to defend the rupee, in a sign of growing concerns about the health of the financial system. The central bank has been seeking to defend its currency by selling dollars and marshaling foreign exchange held by commercial banks, which is based on their exposure to foreign payments rather than their levels of reserves.
The Reserve Bank of India has sold $2 billion in foreign currencies since early December, data showed on Thursday, while the rupee slumped and FX reserves suffered their biggest drop in two years. Despite an attempt by the Reserve Bank of India (RBI) to stabilize the rupee, it suffered a further fall in reserves on Thursday as banks sold dollars to bolster the ailing currency.
Indian forex reserves fell by $2 billion on November 14 as the central bank sold dollars to defend the rupee, in an effort to shore up its foreign exchange reserves. India's forex reserves dropped by $2 billion to $329.7 billion as the Reserve Bank of India sold dollars to defend the rupee, according to a statement today.
India's reserves, the stockpile of foreign currency held by central banks, fell by $2 billion in August to $316.2 billion as mostly long-term debt securities were sold amid a sell-off of the rupee. The Reserve Bank of India (RBI) on Tuesday announced the sale of USD 17 billion, reducing its foreign exchange reserves by 0.2% to $38.15 billion.
