India's foreign exchange reserves dropped by $14.881 billion to $765.901 billion during the week ended September 18, according to Reserve Bank of India data released on September 26, driven by a fall in foreign currency assets as the central bank intervened to support the rupee.
The decline comes as the rupee remains under sustained pressure from elevated crude oil prices and a strong US dollar. On September 28, the rupee slipped toward 96 against the US dollar — closing at a provisional 96.03, down 28 paise, per CNBC TV18, while the Economic Times reported a 95.9825 close after dollar sales by state-run banks, most likely on behalf of the RBI, curbed losses.
Why reserves are under strain
Brent crude breached the $108 per barrel mark on Monday while global equities tanked, adding to the import bill burden. Forex traders expect the rupee to keep a negative bias as the US-Iran stalemate continues, with RBI intervention acting as a buffer at lower levels.
Treasury watchers said the rupee was expected to remain in the 95.50 to 96.00 range, with the central bank continuing to defend the 96.00 level through dollar sales by state-run banks.
The pressure on the currency has mirrored weakness in domestic equities. The Sensex tumbled 1,124.02 points to settle at 72,771.72 on September 28, while the Nifty ended below 22,800. Foreign institutional investors offloaded equities worth Rs 3,693.93 crore on a net basis on September 25, according to exchange data.
Analysts say falling risk assets and the surge in crude prices may continue to pressurise the rupee, though RBI intervention is expected to support it at lower levels. Traders are also watching speeches by US Federal Reserve officials for cues on the dollar's direction.
Sources: Rupee falls 20 paise to 95.95 against US dollar in early trade — The New Indian Express | Stock Market Live Updates: Rupee settles down 0.2% at 95.9825 as RBI curbs fall — Economic Times
The decline comes as the rupee remains under sustained pressure from elevated crude oil prices and a strong US dollar. On September 28, the rupee slipped toward 96 against the US dollar — closing at a provisional 96.03, down 28 paise, per CNBC TV18, while the Economic Times reported a 95.9825 close after dollar sales by state-run banks, most likely on behalf of the RBI, curbed losses.
Why reserves are under strain
Brent crude breached the $108 per barrel mark on Monday while global equities tanked, adding to the import bill burden. Forex traders expect the rupee to keep a negative bias as the US-Iran stalemate continues, with RBI intervention acting as a buffer at lower levels.
Treasury watchers said the rupee was expected to remain in the 95.50 to 96.00 range, with the central bank continuing to defend the 96.00 level through dollar sales by state-run banks.
The pressure on the currency has mirrored weakness in domestic equities. The Sensex tumbled 1,124.02 points to settle at 72,771.72 on September 28, while the Nifty ended below 22,800. Foreign institutional investors offloaded equities worth Rs 3,693.93 crore on a net basis on September 25, according to exchange data.
Analysts say falling risk assets and the surge in crude prices may continue to pressurise the rupee, though RBI intervention is expected to support it at lower levels. Traders are also watching speeches by US Federal Reserve officials for cues on the dollar's direction.
Sources: Rupee falls 20 paise to 95.95 against US dollar in early trade — The New Indian Express | Stock Market Live Updates: Rupee settles down 0.2% at 95.9825 as RBI curbs fall — Economic Times
