India's Forex Reserves dwindles; nearly six-month low!

India's foreign exchange reserves have decreased by nearly $2 billion, reaching an almost six-month low of $652.87 billion as of December 13, according to data from the Reserve Bank of India (RBI) released on Friday.

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

Fluctuations in foreign currency assets are influenced by the RBI's interventions in the forex market and the appreciation or depreciation of foreign assets held in the reserves. The RBI intervenes in the forex market to manage undue volatility in the rupee's value.

Last week, the rupee dropped to its then all-time low of 84.88 due to the yuan's weakness and persistent strong dollar bids in the non-deliverable forwards market. The rupee fell 0.1% last week and ended at 85.0150 on Friday, marking its seventh consecutive week of decline. It hit a record low of 85.10 earlier in the day, influenced by a hawkish stance from the Federal Reserve on future policy rates.

India's forex reserves also include the country's reserve tranche position in the International Monetary Fund.