India’s foreign exchange reserves fall; gold reserves decline

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India’s foreign exchange reserves fell by $7.5 billion to $572.712 billion in the week ending July 15.

The rupee had fallen by 5 paise to close at 79.90 against the US dollar after touching 80.06 against the US dollar on Thursday. As the rupee fell against the US dollar, RBI governor Shaktikanta Das said “you buy an umbrella to use it when it rains!”

Also Read: SBI becomes India’s most valuable listed PSU

“After all, this is the very purpose for which we had accumulated reserves when the capital inflows were strong,” the RBI chief added. Gold reserves also declined by $830 million to $38.356 billion.

Watch: Why do central banks raise interest rates to curb inflation?

Das added that he had “no particular level of the rupee in mind” but asserted that the central bank would like to see an “orderly evolution” with “zero tolerance for volatile and bumpy movements”. Das said the central bank is “engaging” with the forex market to ensure the rupee finds its level in “line with its fundamentals”.

The RBI informed India’s forex reserves had dipped by $80.06 billion to $580.252 billion earlier this month.

On Friday, India’s Sensex reclaimed the 56,000-level as banking and financial stocks gained. The BSE benchmark rose over 390 points to close at 56,072.23 and the NSE Nifty climbed 114.20 points to close at 16,719.45.

(With inputs from Agencies)

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