India’s foreign exchange (forex) reserves dipped for the third consecutive week to $590.588 billion in the week ending June 17, 2022. All components in the forex reserves have dropped with foreign currency assets witnessing a massive fall.
RBI’s weekly statistical data shows total forex reserves dipped by $5.870 billion to $590.588 billion in the week ending June 17 compared to the previous week’s reserves of $596.458 billion.
In the week ending June 17, foreign currency assets stood at $526.882 billion down by $5.362 billion compared to $532.244 billion in the previous week.
Gold reserves stood at $40.584 billion in the week ending June 17, 2022, lower by $258 million compared to the previous week. SDRs were at $18.155 billion declining by $233 million compared to the previous week. Reserve position in the IMF was at $4.968 billion plunging $10 million compared to the previous week.
Indian rupee on Friday closed at its all-time low of 78.33 against the US dollar at the interbank forex market due to growing worries over aggressive monetary policy tightening, and persistent foreign capital outflows. However, the weakening was limited due to positive domestic equities and a weak American currency.
Jateen Trivedi, VP Research Analyst at LKP Securities on Thursday said, “Rupee weakness can continue till the time Crude stays above $95, any breach below $95 and lower level sustained on Crude shall provide strong support to the rupee. Rupee range can be seen between 77.75-78.50 price can show volatile movements between the said range.”
Today, crude oil prices rise by $3 per barrel aided by tight supply. However, both crude benchmarks were heading for their second weekly drop amidst fear of rising interest rates pushing the global economy into recession.
Jeffrey Halley, an analyst at brokerage OANDA in a Reuters report said, “Increasing recession fears appear to be prompting a culling of heavy speculative long positioning in both contracts, even as in the real world, energy tightness is as real as ever.”
Currently, Brent crude was around $113.5 and climbed over 3%. While the US WTI crude jumped over $108 per barrel with a nearly 4% upside.
Earlier this week, US Federal Reserve Chair Jerome Powell stated that higher rates are painful but are the means the central bank has to slow inflation. He also said that the Fed is not trying to engineer a recession to heel inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn.
So far in 2022, FPIs outflow stands at ₹2,12,996 crore from the equities. In June so far, FPIs pulled back ₹45,841 crore from the Indian equities.
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