India’s forex reserves drop $4.8 bn from an all-time high, settling at $670.12 bn as of Aug 9

Forex reserves, as of August 2, had touched an all time high of $675 billion, reflecting a robust external sector performance.

According to the Weekly Statistical Supplement released by the RBI, Foreign currency assets (FCAs) were down by $4.079 billion to $587.9 billion. Expressed in dollar terms, the FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves, too saw a fall $860 million to $59.23 billion. Meanwhile, SDRs for the above mentioned week were up by $121 million to stand at $18.28 billion.

Moreover, Reserve position in the IMF was up by $18 million to $4.63 billion.

Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.