Reserves drop as FCNR inflows dry, RBI dollar sales continue

India's forex reserves dropped to $734.6 billion in the week ended October 2, marking the fourth consecutive weekly decline from a peak of $785.71 billion recorded on September 4. The RBI has been actively intervening through dollar sales in the spot market and sell/buy forex swaps to defend the rupee, which weakened to 96.8450 per dollar—near its all-time low of 96.96—pressured by rising oil prices, increasing overseas interest rates, and continued FPI outflows.