India’s foreign exchange reserves skid to an over two-year low as the Reserve Bank of India (RBI) continued to defend a falling rupee.

Hitting the lowest since 24 July 2020, the forex reserves fell by $3.85 billion to $524.52 billion in the week ending 21 October.

This was the week in which the rupee touched a record low of 83.29 a dollar, prompting the RBI to intervene in spot and forward markets to stem the slide of the Indian currency. The week saw the rupee depreciating 0.4% against the US dollar. During the week, the dollar index, which measures the US currency against six major currencies, strengthened 0.6%.

Though the forex reserves rose marginally by $204 million during the week ended 7 October due to gains in gold reserves, it has been falling for the previous eight consecutive weeks.

For the week that ended on 14 October, the forex reserves had dropped to $528.37 billion. 

Foreign currency assets (FCA), a major component of the overall reserves, saw a drop of $3.593 billion to $465.075 billion during the week to October 21, according to the Weekly Statistical Supplement released by the RBI on Friday.

Expressed in dollar terms, the foreign currency assets 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 saw a decline of $247 million in value to $37.206 billion, the RBI said.