India's forex reserves drop by $2.83 billion to $640.33 billion

India's foreign exchange reserves experienced a second consecutive week of decline, reaching a six-week low of $640.33 billion,decline of $2.83 billion, as of April 19, according to data released by the Reserve Bank of India (RBI) on Friday. This contraction comes amidst various economic dynamics impacting global currencies and financial markets.

Reserve position in the IMF dipped by $2 million to $4.63 billion, according to information.It can be noted that this month, the country's forex kitty had reached an all-time high of $645.6 billion.The Reserve Bank of India (RBI) intervenes in the foreign exchange market to curb excess volatility in the rupee, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
For the week to which the foreign exchange data pertains, the rupee had fallen to a lifetime low of 83.5750 to the dollar but logged marginal weekly losses. The RBI sold around $1.5 billion in the non- deliverable forwards (NDF) market last Friday, when the Iran-Israel flare-up pressured the rupee, according to recent report. 
Changes in foreign currency assets are caused by the RBI's intervention as well as the appreciation or depreciation of foreign assets held in the reserves.  Foreign exchange reserves also include India's reserve tranche position in the International Monetary Fund.

(Ira Singh, Asstt Editor, Gandhinagar)