India’s forex reserves dip to nearly six-month low

India’s foreign exchange reserves fell by nearly $2 billion to an almost six-month low of $652.87 billion as of December 13, data from the Reserve Bank of India (RBI) showed on Friday.

The reserves had declined by $3.2 billion in the week of December 6, and have declined by $52 billion from the record high of $704.89 billion hit on September 27.

Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.

The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.

Last week, the rupee declined to its then all-time low of 84.88, pressured by weakness in the yuan and persistently strong dollar bids in the non-deliverable forwards market. The currency fell 0.1% last week.

The domestic unit ended at 85.0150 on Friday, down for a seventh consecutive week. It hit a record low of 85.10 earlier in the day, after a hawkish turn in the Federal Reserve’s future outlook on policy rates.

The forex reserves also include India’s reserve tranche position in the International Monetary Fund.