India's foreign exchange (FOREX) reserves fell USD9.646 billion to USD622.275 billion in the week ending March 11, the largest drop in over two years, as the Reserve Bank of India (RBI) sold dollars in large quantities to prevent the rupee's value from falling further. Foreign currency assets, the largest component of FX reserves, fell by USD11.108 billion to USD554.359 billion during the week under review, according to the RBI's weekly statistics supplement.
On March 7, the Indian rupee hit a new low of 77.02 against the US dollar. The RBI engaged in the currency markets by selling dollars, according to market observers. During the week, the central bank is thought to have sold USD1 billion worth of cash to prevent further depreciation in the Indian rupee.
The drop in foreign reserves during the week ending March 11 was the most significant in nearly two years. During the week ending March 20, 2020, the country's foreign exchange reserves fell by USD11.9 billion. In the week ending September 3, 2021, the country's currency reserves reached an all-time high of USD642.453 billion. The value of India's SDRs with the International Monetary Fund (IMF) fell by USD53 million to USD18.928 billion. According to RBI data, India's reserve position at the IMF fell by USD7 million to USD5.146 billion in the week ending March 11.