Forex reserves continue to move down; fall by another $1.4 billion

Raghuram Rajan has described the fall in reserves as dip in valuation with appreciation of dollar against other currencies

Falling for the fourth week in a row, India's foreign exchange reserves went down by $1.415 billion to $314.181 billion in the week to September 26 on account of a hefty drop in non-US currency assets.

In the previous week, the reserves had fallen by $101.3 million to $315.596 billion. During the week to July 25, the reserves had touched $320.56 billion, a shade away from the life-time high of $320.79 billion recorded on September 2, 2011.

During the reporting week, the foreign currency assets (FCAs), a major constituent of overall reserves, dropped by $1.391 billion to $287.392 billion, RBI data showed.

FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of the non-US

currencies such as the euro, pound and yen held in reserves.

Reserve Bank Governor Raghuram Rajan has described the fall in reserves as dip in valuation with appreciation of dollar against other currencies.

"In the recent weeks the dollar has been appreciating against the other currencies. Therefore, when we look at our reserves in dollar terms, they have been coming down," Rajan had said on the policy day on Tuesday.

He added that the fall in the forex kitty was not due to the central bank selling the greenback.

The gold reserves remained unchanged in the week under review at $20.933 billion.

The special drawing rights were down $17.4 million to $4.307 billion, while the country's reserve position with the IMF dipped by $6.2 million to $1.548 billion during the week, the data showed.