The contraction in total reserves was driven by a fall in gold reserves, which dropped $13.49 billion to $117.19 billion during the reported week.
The Indian rupee weakened against the US dollar due to rising crude oil prices, geopolitical tensions in the Middle East, and foreign fund outflows.
Importers are rushing to hedge their dollar positions amid the sharp depreciation of the rupee against the American currency and expectations of further volatility even as exporters are holding off after suffering mark-to-market (MTM) losses on earlier hedges.
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