The reserves, which have been dipping as the central bank deploys the kitty to defend the currency amid a pressure caused majorly by global developments, had declined by USD 2.23 billion to USD 550.87 billion in the previous week. Finance minister Nirmala Sitharaman on Monday had said "due to the strength of our microeconomic fundamentals, rupee is holding out well. The rate of fall of other currencies vis-a-vis against the US dollar has been sharply much more than the Indian rupee".
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New Delhi: India has fairly large reserves to tide over the turmoil in the currency markets, a top government official has said, dismissing concerns over the decline in forex reserves.
"There has been a depletion as inflows have come down and the trade deficit is higher... I don't see this as a concern, India has fairly large reserves to tide over this situation," economic affairs secretary Ajay Seth said on Tuesday.
He added that most of the global currencies are under pressure and suitable measures will be taken in the due course.
India's foreign currency reserves have fallen to $546 billion on September 16 from the record high of $642 billion a year ago, declining for the seventh consecutive week.
Seth said concerns over reserves were "overblown".
After hitting a record low at 81.67 against the dollar on Monday, the rupee recovered on Tuesday and closed at 81.58 against the greenback.
Finance minister Nirmala Sitharaman on Monday said "due to the strength of our microeconomic fundamentals, rupee is holding out well. The rate of fall of other currencies vis-a-vis the US dollar has been sharply much more than the Indian rupee".
"Now what is our strategy? The interventions, if at all, the RBI makes using the Indian reserves, which I think ($) 75 billion has been used, essentially to stop fluctuations, the severe volatilities. The RBI is not aiming to fix a rate, the exchange rate and the government doesn't believe in it," she had said.
The dollar soared after the US Federal Reserve last week raised the benchmark lending rate by 75 basis points sending global currencies plummeting.
Seth said the government intends to stick to a fiscal deficit target of 6.4% of GDP for the current fiscal ending March 2023.
"So, we don't intend to, I will say that path will be adhered to, there is no need to overshoot, we are well into that aspect," Seth said.
The government has budgeted ₹14.31 lakh crore gross market borrowing for the current financial year, of which ₹8.45 lakh crore is estimated to be borrowed in the first half of the fiscal.
The borrowing calendar for the second half will be announced on October 1.
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