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 "rupee, banknotes")
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The rupee has depreciated by about 5.5 per cent against the dollar since the beginning of the Iran war | Image: Bloomberg
The data released by the Reserve Bank of India (RBI) last week showed that India’s foreign-exchange reserves declined by $14.9 billion in the week ended September 18, the sharpest weekly fall since November 2024. It has also been reported that the RBI sold foreign exchange worth $10.9 billion and the rest of the decline resulted from revaluation. Net foreign-exchange sales of about $11 billion by the central bank in a week were significant, and presumably done to support the rupee, which is under pressure largely owing to the recent spike in prices of crude oil. Renewed tensions in West Asia and increased uncertainties over the ongoing conflict between the United States (US) and Iran have pushed up prices. Prices of benchmark Brent crude increased over 17 per cent over the past month.
