India’s foreign exchange reserves fell to their lowest in over 20 months as the central bank stepped up its intervention to protect the rupee from tumbling past 80 a dollar.
The reserves fell $7.5 billion to $572.7 billion as of July 15, data by the Reserve Bank of India released Friday showed. The reading is the lowest since November 6, 2020. In the first two weeks of July, the Indian central bank saw its reserves falling $15.5 billion, most of it defending the currency.
India’s reserves had peaked to $642.45 billion on September 3, 2021.
The data comes as RBI Governor Shaktikanta Das mounted a strong defense to soothe market fears over further currency losses earlier in the day. India’s reserves are adequate enough and the central bank will intervene to contain the volatility, Das said.
The Indian rupee has fallen 7% this year amid rising interest rates in the US and risk-off sentiment as well as domestic fund outflows. The decline is raising worries with impact seen on inflation, external deficits and company profits.
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