MUMBAI: The foreign exchange reserves continued to fall for the fifth consecutive week to an over two-month low of $682.13 billion for the week ending November 1, dropping by $2.7 billion as the central bank continued to defend the unit which has been under continuous assault by the dollar.
Since the peak it climbed in the week to September 27, when the forex kitty had crossed a record $704 billion, it has fallen by a total of $20.1 billion in the previous four weeks.
Meanwhile, the rupee weakened to a record low on Friday and logged its worst weekly fall since May, pressured by sustained outflows from local stocks and expectations of a stronger dollar after Donald Trump won the US election. The rupee closed at 84.375 against the dollar, after declining to 84.38 late in the session, eclipsing its previous all-time low of 84.3775 on Thursday.
In the period for which the forex reserves data pertains, the rupee had briefly hit a record low of 84.0950 amid outflows from the equity and debt market.
Traders said state-run banks were spotted offering dollars, most likely on behalf of the central bank, which helped limit the currency's losses.
The benchmark Sensex and Nifty are down more than 8 percent from the record high in late September as overseas investors have pulled out over $12.5 billion from the market since October 1, of which as much $11 billion flew out in October alone.
According to the weekly statistical supplement issued by the Reserve Bank on Friday, the fall in the kitty was due to the changes in foreign currency assets caused by the central bank's intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
For the week ended November 1, foreign currency assets, a major component of the reserves, decreased by $3.902 billion to $589.849 billion. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves increased by $1.224 billion to $69.751 billion during the week, the RBI said, adding the special drawing rights (SDRs) were down by $1 million to $18.219 billion.
The reserve position with the IMF was up by $4 million to $4.311 billion in the reporting week, the data showed.
The RBI intervenes on both sides of the forex market to prevent undue volatility in the rupee and traders said the central bank's relentless intervention helped the local currency avert deeper losses.