India's forex reserves drop to 10-month low of $626B
What's the story
India's foreign exchange (forex) reserves have witnessed a sharp decline for the sixth consecutive week.
The reserves fell by $8.7 billion to a 10-month low of $625.9 billion for the week ending on January 10, according to data from the Reserve Bank of India (RBI).
This marks a major change in India's financial landscape.
Asset fluctuation
FCA down by $9.5B
The RBI's data also showed that foreign currency assets, a key component of the total reserves, decreased by $9.5 billion. Meanwhile, the value of gold reserves increased by $792 million during the same period.
Market intervention
Forex reserves' decline linked to INR's depreciation
The fall in forex reserves is mainly due to the RBI's intervention in the foreign exchange market.
The move comes as a bid to control the rapid depreciation of the Indian Rupee, which has been under immense pressure over the past few months.
Since October 1, the Indian currency has depreciated by 3.2%, adding to the economic woes.
Currency depreciation
INR continues to weaken against US Dollar
The Indian Rupee continued its downward trend, losing 6p against the US Dollar yesterday. It closed at 86.61/$, marking a further weakening of the currency.
Over this week alone, the INR has depreciated by 0.74% against the greenback, highlighting ongoing challenges in India's foreign exchange market amid declining forex reserves.