Foreign Currency Reserves Declines: India’s foreign exchange reserves may continue to decline. And by the end of 2022, it may touch a two-year low. In fact, the RBI has to intervene to stop the record fall of the rupee every day against the dollar. In such a situation, there can be a huge reduction in the foreign exchange reserves of India.
These things have come to the fore in a poll conducted by Reuters. A year ago, RBI used to have foreign exchange reserves of $ 642 billion. Now it has come down by $100 billion and it remains only $545 billion. At the same time, according to the Reuters poll, the foreign exchange reserves can come down to $ 523 billion, that is, there may be a further decrease of $ 22 billion from the current level. The participants of the poll believe that the foreign exchange reserves can be between 500 and 540 billion dollars.
After the depreciation of the rupee against the dollar in 2008 and 2013, the rate at which there was a reduction in foreign exchange reserves has come down this time at a faster rate than that. The rupee has depreciated 10 percent in 2022. And on Wednesday, the rupee has fallen to the level of 81.95 against a dollar.
After the continuous fall in the rupee, many experts believe that RBI can intervene to stop it, which can lead to further decline in foreign exchange reserves.