The forex reserve held by India have dropped under the $400 billion mark. This is according to a report from the Reserve Bank of India.
The move comes as the Indian rupee has been changing in value. More rupees are linked to the American dollar and other major currencies throughout the world, thus suggesting that the rupee may not be worth as much as it used to.
The RBI is selling many of its dollars to prevent the local currency in India from being too volatile. The total has fallen by more than $20 billion over the past few months.Advertisement
The reserve total fell by $820 million on the week of September 7. The total specifically went to $399.282 billion.
The total value of the forex reserves in India was closer to $426 billion in the early part of April. This came as the Indian rupee experienced depreciation. The currency has depreciated in value by about 9 percent since April. This has led to other currencies having a larger value over the rupee with the American dollar being the most prominent one to change.
With the rupee being measured against the American dollar at a total of 72.69/70, the RBI has sold about $8 billion in the spot market in the last few months. The key was to keep the level of currency depreciation from being worse than it had already become recently.
The RBI states that the currency stores have been suitable and helpful for the country. There is a general belief that there is a sense of stability in the forex reserves and that the rupee will not be at further risk.
The value of the Indian rupee has dramatically changed throughout the past year. The USD/INR total was listed at around 64 during the start of the year, but that total has moved up to 72 in recent time, a sign that the rupee may not be worth as much as the American dollar. The total is among the highest that has been recorded in recent history based on its general value.
There is also a volatility percentage total of about 0.3% surrounding the currency. The total suggests that there is a general sense of uncertainty over what might come about with the currency and how it is valued over time.
The USD/INR pair has also experienced some of its greatest highs in years. The pair has not reached over 70 in the past ten years. The closest that the pair had reached prior to this point was around the middle part of 2013 when the currency had gotten close to 68. The total had been close to around 65 for a sizeable part of the last few years before they move forward.
Similar shifts have also been noticed with the Euro, British pound, and Canadian dollar. The number of rupees involved with one of these particular currencies has also grown in value to record numbers, thus reflecting upon concerns over the depreciation of the currency. These moves have led to India looking to change some of the reserves that it has held in recent time.