India’s forex reserves fall to one-year low

India’s foreign exchange reserves fell to a more than one-year low of $681.4 ​billion in the week ended May 22, from $688.89 billion ‌a week earlier, the Reserve Bank of India (RBI) data showed on Friday.

The $7.5 billion decline was largely due to a $4.5 ​billion fall in the value of the ​central bank’s gold holdings, week-on-week.

The value of the RBI’s foreign currency assets also shrunk by ​nearly $3 billion to $543 billion.

Changes in foreign currency assets, expressed ​in dollar terms, include the effect of appreciation or depreciation of other currencies in the reserves.

The RBI has been selling ​dollars to defend the beleaguered rupee, which has ​declined 4 percent since the US-Iran war began, as surging energy ‌prices sparked capital outflows and clouded India’s macroeconomic outlook.

In the week to which the data pertains, the rupee slid to a record low of 96.96 per dollar ​before being shored ​up by firm RBI intervention over multiple trading sessions, including likely on Friday.

It ended the ​session at 95 per dollar, up ​0.7 percent week-on-week. Foreign exchange reserves include India’s Reserve Tranche position in the International Monetary Fund.