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Foreign exchange reserves fall by $1.7 billion in the week to January 1

The reserves, which act as a cushion against dollar outflows and provides the critical import cover, stood at $350.369 billion at the end of the reporting week, RBI said.

, ET Bureau|
Updated: Jan 08, 2016, 06.01 PM IST
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The reserves, which act as a cushion against dollar outflows and provides the critical import cover, stood at $350.369 billion at the end of the reporting week, RBI said.
The reserves, which act as a cushion against dollar outflows and provides the critical import cover, stood at $350.369 billion at the end of the reporting week, RBI said.
KOLKATA: India's foreign exchange reserves fell $1.68 billion in the week to January 1 as the Reserve Bank of India seems to have intervened in the market to soften the fall of the local currency facing withdrawal of foreign investment.

The reserves, which act as a cushion against dollar outflows and provides the critical import cover, stood at $350.369 billion at the end of the reporting week, RBI said in its weekly data.

Pressure on reserves is likely to intensify in the weeks to come as global investors may withdraw their investments from emerging economies and seek refuge to safer destinations, specially after the uncertainty led by China's decision to devalue yuan.

On Wednesday, the People's Bank of China surprised the markets again by setting the official midpoint rate on the yuan at 6.5646 per dollar, the lowest since March 2011. A few weeks earlier, it had extended yuan trading hours to 11.30 pm local time, a move aimed at attracting more market participants leading to speculative bets.

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