Foreign exchange reserves drop $ 4.5 billion in two weeks

India’s foreign exchange reserves fell $ 1.783 billion in the week to December 3, making it the second consecutive weekly decline as foreign portfolio investors remained net sellers in the equity market .

Reserves stood at $ 636.905 billion, according to weekly data from the Reserve Bank of India. Reserves have fallen by $ 4.5 billion in the past two weeks.

The depreciation of the local currency against other major world currencies also weighed on reserves.

Foreign currency assets, which reflect the change in the valuation of reserves held in other global currencies like the euro, British pound and Japanese yen, fell $ 1.483 billion to $ 573.181 billion.

The rupee also depreciated against the US greenback on Friday and closed at 75.77 from 75.52 on Thursday. This is the rupee’s third consecutive weekly fall on bets that high inflation in the United States could accelerate the unwinding of bond purchases and an earlier rate hike by the Federal Reserve, Sriram Iyer said , Senior Research Analyst at Reliance Securities.

The rupee fell 0.8% this week against the dollar, adding to the 1.3% decline in the past two weeks.

According to NSDL data, foreign portfolio investors have sold shares worth Rs 17,484 crore in December so far. Adding to the net sale of Rs 33,799 crore in November, it’s relentless, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

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