India's Forex Reserves Fall To $688 Billion In Third Consecutive Drop

India's foreign exchange reserves declined to $688 billion for the week ended Oct. 18, according to data from the Reserve Bank of India on Friday.

The country's forex kitty fell by $2.2 billion over the previous reporting week.

In the previous reporting week, the reserves had dropped by $10.75 billion to $690 billion. In the week-ended Sept. 27, India's forex reserves reached a record high of $704.89 billion for the sixth consecutive session.

Foreign investors have pumped in Rs 1.68 lakh crore into the country's debt and equity markets so far this year, according to data from the National Securities Depository Ltd. 

The month of October so far has seen Rs 1,00,242 crore make its way out of Indian bonds and equities.

The Indian rupee closed flat against the US dollar on Friday. The local currency ended the trading day at Rs 84.081, compared to the previous day's close of 84.077. The recent pressure on the rupee, trading near its all-time low, has come from foreign equity outflows from India and the greenback's strength globally.

For the week ended Oct. 18, foreign currency assets—a major component of the reserves—fell to $598 billion, according to the RBI data.

In dollar terms, foreign currency assets include the effect of the appreciation or depreciation of non-US units like the euro, pound, and yen held in foreign exchange reserves.

Gold reserves decreased to $67.444 billion during the week.

As of Friday, gold is trading at Rs 78,060 per 10 grams, according to the India Bullion and Jewellers Association Ltd. This slight dip comes as both metals have been hovering near their all-time highs, driven by traditional demand during the auspicious buying period of Dhanteras.

The fluctuations in gold and silver prices are heavily influenced by the upcoming wedding season also, which further fuels demand from local jewellers as they prepare to stock up for the festivities.