reserve bank of india: India’s foreign exchange reserves fall by $3 billion in the week ending August 26

India’s foreign exchange reserves dipped by $3 billion in the week ending August 26 as the Reserve Bank of India continued digging into its reserves to prevent the rupee’s slide.

The reserves stood at $561.046 billion, before the US Jackson Hole Symposium which took place on August 26 and saw Fed chairman Jerome Powell making hawkish commentary on the fight against inflation.

India lost about $45 billion in reserves since April but the pace of fall slowed down, RBI data showed.

Portfolio investors sold Indian assets worth over $7 billion this fiscal so far on net basis while they have been net buyers for two months in a row. In August, overseas portfolio investors pumped in about $7.6 billion in Indian equities and debt.

There is however moderation in case of non-portfolio capital flows like external commercial borrowing and NRI deposits – both could remain below trend in FY23 amid rising rates and weakening of domestic currency, according to QuantEco Research.

Out of the total reserves, foreign currency assets stood at $498.645 billion while reserves held in gold were valued at $39.643 billion. The balance is kept with the International Monetary Fund as special drawing rights and reserves.