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The RBI sells dollars to defend the rupee, cutting forex reserves by $2 billion

The RBI intervened to support the rupee during the week ending August 12 to shrink India’s forex reserves by over $2 billion.There was a $2 billion drop in India’s foreign exchange reserves in the week ending August 12, as the Reserve Bank of India intervened to support the rupee.

Although currency markets are extremely volatile, the Indian central bank is committed to maintaining the rupee’s stability, limiting wild swings regardless.

Forex reserves plummeted to $570.74 billion in the week ending August 12, down by $2.238 billion from $572.978 billion the week before.

In the latest week, the country’s import cover declined for the second time in a month.

As a result of Russia’s invasion of Ukraine, India’s forex reserves have fallen for 19 weeks out of a total of 25 since then, with nearly $61 billion lost.

India’s forex reserves are the fourth largest in the world, according to RBI governor Shaktikanta Das after the central bank’s third consecutive rate hike.Following a broader capital exodus into dollar-denominated assets, the rupee has fallen to just under 80 per dollar from about 74 prior to the Ukraine crisis.

FAQ :-

1- The Indian rupee has fallen from 74 dollar to 80 dollars?

Ans – Yes

2- What was the reason for the fall of Indian currency value?

Ans – Due to the Ukraine invasion-related impact, the reserves fell to $56 billion as of July 29 this year from $70 billion during the 2008-09 global financial crisis.

3- How much loss happened during Russia’s invasion of Ukraine?

Ans- $61 billion lost

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