The latest data released by the Reserve Bank of India (RBI) revealed that the country’s foreign exchange reserves plummeted to USD 644.4 billion (or Rs 54.79 lakh crore), the lowest since May 2024. The rupee on Friday recorded its steepest slide ever, hitting a record low of Rs 85.80 against the dollar before RBI intervened and settled it at 85.48.
“The Reserve Bank of India has been actively intervening to stabilise the currency, with net forex market sales of USD 9.28 billion in October,” said Ajit Mishra, SVP of research at Religare Broking.
India’s forex reserves crossed USD 7 billion (around Rs 59 lakh crore) by the end of September 2024. However, rampant selloff by foreign investors (FIIs) and the strengthening dollar fuelled by global demands, US Fed action, and the incoming Trump presidency put massive pressure on the rupee.
According to the latest RBI data, India holds USD 65.7 billion in gold reserves.
The RBI also updated the cash reserve ratio (CRR) on Saturday to 4 per cent in line with the latest monetary policy announcement, from 4.25 per cent as of December 14, 2024.
CRR is the minimum proportion of total deposits that commercial banks need to keep as reserves in cash or as deposits parked with RBI. These reserves cannot be lent or used for investment. A lower CRR means banks can provide loans to a larger number of businesses or borrowers for investment purposes, effectively increasing the growth rate of the economy.
ALSO READ
- Sensex, Nifty improve, but equity markets fail to stop rupee from hitting new all-time low
- 2025 could be the year of consolidation; important to have rational expectations: Nippon MF’s Sailesh Bhan
- Govt data for steel plants: Gujarat is national leader, but these south states suffer from lack of enough steel units
India’s central bank on Friday announced the dates for the issuance of treasury bills for the quarter ending March 2025. Bills worth Rs 28,000 crore would each be auctioned a day before its issue on January 2, 9, 16, 23, and 30; and February 6 and 13. Treasury bills worth Rs 33,000 crore would each be issued on February 21 and 28; March 6, 13, 20, and 27, 2025.
