India's foreign exchange reserves (forex) plunged by $336.5 million to $287.62 billion in the week ended July 6, data from India's central bank showed.
The Reserve Bank of India (RBI) did not provide any reasons for the decline, but it is understood the central bank has sold dollars from the reserves to curb the slide in the value of rupee.
The Indian rupee slumped to record lows in recent weeks owing to high current accounts deficit, increased demands from oil importers and outflow of foreign institutional investors (FIIs) funds, as poor gross domestic product (GDP) growth data dampened sentiment in the Indian markets.
However, the rupee value gained some strength Friday when it closed at 55.15 against a dollar as the trade deficit narrowed down to $10.3 billion in June against $14.4 billion in the same month last year.
The forex had grown by $1.36 billion to $289.992 billion in the week ended June 29.
Foreign currency assets, the biggest component of the forex reserves kitty, fell by $ 357.4 million to $254.63 billion for the week under review, the RBI said in its weekly statistical supplement.
According to RBI, assets in US dollar terms included the effect of appreciation or depreciation of non-US currencies such as pound sterling, euro and yen held in reserve.
The foreign currency assets had grown by $1.17 billion to $256.95 billion for the week ended June 29.
The value of gold reserves remained during the week under review remained the same at $25.76 billion.
The value had increased by $0.17 billion in the week ended June 29. It had declined in the week ended June 1 by $1.03 billion to $25.58 billion and since remained the same till week ended June 22.
The value of special drawing rights (SDRs) fell by $5.5 million to $4.35 billion and India's reserves with the International Monetary Fund (IMF) plunged by $3.6 million to $2.87 billion.