Foreign exchange reserves rose by a marginal $157.3 million last week, indicating that the RBI may have refrained from selling dollars in the forex market despite a falling rupee.
Forex reserves, as on January 24, were $292.24 billion, down $3.5 billion from a year ago, data from the RBI showed.
The RBI publishes its forex market interventions data with a two-month lag, but weekly reserve data serve as a loose indicator of the central bank’s market interventions.
The rupee had weakened 1.69% last week, owing to a sell-off in most emerging market currencies after Argentina devalued its peso and data from China showed that the world’s second biggest economy could see a sharp slowdown.
Concerns that the US Federal Reserve may trim its monthly bond purchases further, which the Fed announced as expected this week, also pressured currencies. The rupee ended at 62.66/$ on Friday.
While currency dealers had said that public sector banks had bought dollars intermittently, these purchases could not be attributed to be on behalf of the RBI.
Further, the fall of the rupee was far lower compared with currencies of other current account deficit countries — Brazil, Turkey, South Africa and Indonesia — termed as ‘fragile’.
For instance, the Turkish lira tumbled 4.3%, while the Brazilian real, the South African rand and the Russian ruble each fell more than 2%.