Strengthening dollar coupled with attempts by the Indian central bank to curb volatility in rupee value depleted India's foreign exchange reserves by $149.7 million, experts said on Saturday.
Overall, the forex reserves stood at $352.36 billion for the week ended 20 November. India's forex kitty had gained by $780.9 million to $352.51 billion during the previous week ended 13 November.
"The slight fall in the Forex reserves can be attributed to the dollar selling by Reserve Bank of India (RBI) to stabilise the rupee value," said Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities.
"The rupee value has come under pressure due to the heavy flight of foreign funds from India due to the upcoming US rate hike expected in December," he added.
Foreign funds have been on a selling spree in the Indian debt and equity markets ahead of the US Fed's imminent rate hike decision slated for December.
On a weekly basis, the rupee had weakened by nine paise to 66.19 to a US dollar (20 November) from its previous close of 66.10 to a greenback (13 November).
The data with the National Securities Depository Limited (NSDL), showed that the FPIs (Foreign Portfolio Investors) sold Rs.5,459.41 crore or $825.49 million in equity and debt markets from 16 to 20 November.
The data with stock exchanges showed that the FPIs sold stocks worth Rs.2,749.44 crore in the period under review ended 20 November.
The FPIs have taken out Rs 23,352 crore during August-September. Till date in November, foreign investors have off-loaded stocks worth Rs.5,809 crore.
The Indian central bank intervenes in the open markets, if the rupee value comes under heavy attack, by either buying or selling the greenback.
In addition, the RBI's weekly statistical supplement revealed that the foreign currency assets (FCAs) receded by $133.5 million to $328.39 billion in the week under review.
"The FCA depletion happened on the account of dollar strengthening against the major global currencies like pound sterling, euro and yen which are held in reserve. The dollar appreciated by an approximate 1 percent against the global currencies," the RBI was quoted as saying in its statistical supplement.
