As the Reserve Bank of India (RBI) sold dollars to arrest the fall of the Indian Rupee, India’s forex reserves depleted the most among all emerging economies. Since the beginning of 2022, India’s reserves have fallen 13.88 per cent from $633.6 billion to $545.6 billion, according to a report in BusinessLine (BL).
After India, Russia’s forex reserves fell over 10 per cent, followed by Indonesia’s 9.19 per cent. On the other hand, Taiwan’s foreign reserves fell the least, only 0.53 per cent.
However, RBI’s steps have been able to limit the fall in the rupee. The rupee proved to be more resilient than most of the other currencies in the world. Against a US Dollar, rupee fell 8.9 per cent. Whereas the fall in South Korea’s won was the highest at 16.37 per cent, followed by Thailand and Taiwan at 12.5 per cent, the report added.
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The only currencies that have gained value against the $ are the Russian ruble, Brazilian real, and Mexican peso.
Until September 14, the rupee had fallen 6.9 per cent. The currency fell rapidly in the next 10 days following strict rate hikes by the US Fed, BL added.
On Thursday, the rupee closed at 81.73 per cent against the US dollar. On Wednesday, it closed at an all-time low of 81.94.
The RBI will on Friday announce the monetary policy. Experts have said that the bank may go with a 50 basis points hike, taking the repo rate to 5.9 per cent.
This becomes necessary due to the high inflation and fall in the value of the rupee. If the Indian currency continues to fall, it may lead to a further fall in India’s foreign reserves, they added.