Politics · India Bureau
India's forex reserves tumble $18.3 billion in biggest weekly drop
India's foreign exchange reserves have declined for three consecutive weeks, shedding approximately $38.2 billion as the Reserve Bank of India steps up intervention to shore up the rupee against mounting oil price pressures.
LSN India ·
The Indian rupee has come under sustained selling pressure as crude oil prices climbed, prompting the central bank to actively deploy its forex reserves to stabilize the currency. The $18.3 billion weekly decline marks the steepest single-week contraction on record, underscoring the scale of intervention required to manage currency volatility.
Over the three-week period, reserves have eroded by more than one-third of the weekly record loss, signaling persistent headwinds facing India's external position. Rising global crude prices have widened the country's import bill, placing additional strain on the rupee as foreign investors adjust their positions and importers rush to meet dollar requirements.
The RBI's intervention strategy reflects the central bank's commitment to preventing excessive rupee depreciation, which could fuel imported inflation and complicate monetary policy decisions. However, the rapid depletion of forex reserves raises questions about the sustainability of such defensive measures if external pressures persist.
Analysts are closely monitoring the trajectory of oil prices and global capital flows, which will determine whether the rupee stabilizes or faces further weakness. The weekly reserve figures provide a real-time gauge of the RBI's actions and India's capacity to absorb external shocks without allowing currency volatility to spiral.