India's FX reserves drop $9 billion to about $689 billion, reflecting tariff-driven rupee defence

Mumbai: India’s foreign exchange reserves fell to $688.9 billion as of August 1, Reserve Bank of India Governor Sanjay Malhotra said on Wednesday.

The forex reserves fell $9.3 billion compared to the previous week, which economists said reflects the central bank's defence of the rupee amid tariff-related uncertainties.

Detailed data on forex reserves will be released later this week.

The rupee slid 1.18% against the dollar in the week through August 1, marking its sharpest weekly decline in nearly three years.

It has lost another 0.2% so far this week and would likely
have breached its record low if not for the Reserve Bank of
India’s intervention to support the currency, according to
traders.

India faces the imposition of a 25% tariff on its shipments
to the U.S. from Friday, and President Donald Trump has warned
of "very substantial" additional levies because of New Delhi's
oil imports from Russia.
The RBI kept its growth forecasts unchanged at its policy review
on Wednesday and left rates unchanged.

"Given that the Indian rupee is weakening and narrowing of
the global interest rate differentials, the scope for rate
reduction was slim," said Umesh Kumar Mehta, chief investment
officer at SAMCO Mutual Fund.