Forex reserves plunge below USD 400 billion mark

Mumbai: The country's forex reserves declined by USD 819.5 million to USD 399.282 billion for the week to September 7 -- slipping below the USD 400-billion mark for the first time in over a year, Reserve Bank data showed on Friday.

This is the second consecutive week of major fall in the reserves which indicates that the central bank has been selling the greenback to fight the fall in rupee, which had crossed the 73-mark earlier this week. The local unit closed at 71.84 Friday. The total reserves had dropped by USD 1.191 billion to USD 400.101 billion in the previous reporting week.

In the week to September 7, foreign currency assets, a major component of the overall reserves, fell by USD 887.4 million to USD 375.099 billion. Expressed in American dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US currencies such as the euro, pound and yen held in the reserves.

After remaining stable for years, gold reserves increased by USD 71.9 million to USD 20.234 billion in the reporting week. But the special drawing rights with the International Monetary Fund dipped by USD 1.5 million to USD 1.476 billion. The country's reserve position with the Fund also decreased by USD 2.5 million to USD 2.474 billion, the apex bank said.