Forex reserves fall sharply by $3.433 billion to $351.92 billion

KOLKATA: India's foreign exchange reserves fell by a whopping $3.4 billion in a single week ending August 28 due to Reserve Bank of India;s dollar sale and the change in valuation of euro, pound and yen against the dollar.

Reserve Bank of India was seen selling dollars to prevent the rupee from depreciating freely. Forex reserves now stands at $351.9 billion, the latest data showed.

Foreign currency assets, which accounts for 93% of reserves, fell by $3.4 billion to $328.3 billion in the reporting week. Foreign currency assets, also reflect the effect of appreciation and depreciation of non-US currencies such as the euro, pound and the yen, held in the reserves.

Foreign exchange dealers said that RBI was seen intervening in the market since the local currency came under intense pressure following China's decision to devalue yuan.

Governor Raghuram Rajan had said that RBI would not hesitate to sell dollars in the market to stem the fall in rupee. The country's current level of reserves is enough to pay for nine months of imports.