India’s foreign exchange reserves dipped $1.783 billion in the week to December 3, making it the second straight weekly fall as foreign portfolio investors remained net sellers in the equity market.
The reserves stood at $636.905 billion, Reserve Bank of India’s weekly data showed. Reserves fell $4.5 billion in the last two weeks.
The deprecation of the local currency against other major global currencies also weighed on the reserves.
Foreign currency assets, which reflects the change in valuation of reserves held in other global currencies like euro, pound sterling and Japanese yen, fell by $1.483 billion to $573.181 billion.
The rupee also depreciated against the US greenback on Friday and closed at 75.77 vis-s-vis dollar compared with 75.52 on Thursday. This is the third straight weekly fall of the rupee on bets that high US inflation could prompt a quicker unwinding of bond purchases and earlier rate hike by the Federal Reserve, said Sriram Iyer, senior research analyst at Reliance Securities.
The rupee fell 0.8% this week against the dollar, adding to the 1.3% fall in the last two weeks.
As per NSDL data, foreign portfolio investors sold equity worth Rs 17484 crore in December so far. Coming on top of the Rs 33799 crore net sale in November, this is relentless, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
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