Since the Ukraine Crisis began, the country has lost almost $80 billion in foreign currency reserves.

Foreign exchange reserves have dropped for six consecutive weeks, hitting a new level not seen in over two years.

The Reserve Bank of India sold dollars to help the rupee cross the 80-to-dollar threshold, resulting in a reduction in India's foreign exchange assets of more than $80 billion since the Ukraine crisis. This includes more than $2 billion in the last week.

For the week ending September 9, the RBI reported that foreign exchange reserves fell to $550.871 billion, a decline of $2.234 billion from the previous week's level of $553.105 billion. This marked the lowest level of foreign exchange reserves in almost two years.

The Reserve Bank of India has been reducing reserves to combat a gain in the US currency caused by capital outflows to dollar-denominated assets, which has led to a decline in India's import coverage for six weeks in a row and 23 out of the past 29 weeks since Russia invaded Ukraine in late February.

Since late October, when they were at their highest, the country's foreign exchange reserves have decreased by more than $90 billion.

Even though there has been a steady influx of foreign capital into the country's markets, the expanding current account deficit has not been able to halt the decline in import coverage.

After the rupee's steep decline from over $74 to a weak record high of over 80 versus the dollar this year, the RBI intervened to manage the currency against significant volatility swings.

The Reserve Bank of India's (RBI) most recent monthly bulletin, published on Friday, lends credence to this, as it revealed that the RBI sold a net $19.05 billion in the spot currency market in July.

As far as the markets in rupees are concerned, this trend has continued through the months of August and into the current one.

The decline in the country's foreign exchange reserves will likely remain front and center for some time as the dollar continues to soar to highs not seen in over two decades against most major currencies.

The rupee had its worst week in five as the dollar reached a record high on Friday, thanks to increased bets on a Federal Reserve interest rate hike and warnings from the World Bank and the International Monetary Fund about slow economic growth and rising inflation.

Reuters cited a currency broker as saying that traders were wary of going above 80 rupees to the dollar.

On Friday, Indian shares plunged into a market slaughter, wiping out the week's gains and extending their losses for the third straight session, following a worldwide sell-off driven by approaching recession fears of the broadest and most aggressive policy tightening in decades.

To protect the rupee from sharp swings, the RBI will keep reducing its reserves.

We expect the rupee's trading behavior to suffer due to the strong dollar and widespread risk aversion. Sharekhan by BNP Paribas analyst Anuj Choudhary told PTI that markets throughout the world dropped after IMF spokesman Gerry Rice voiced concern over a further slowdown in the global economy and claimed that some countries are expected to experience recession by 2023.

The country has fared better than its peers in emerging economies, where import coverage has approached crisis levels despite a significant loss in currency reserves this year.

The Reserve Bank of India reported that for the week ending September, India's foreign exchange assets (FCA), the main component of the country's foreign exchange reserves, fell by $2.519 billion to $489.598 billion from $6.527 billion to $492.117 billion the previous week.

Dollar-denominated foreign currency assets reflect the increase or decrease in value of foreign currencies like the euro, pound, and yen held in foreign exchange reserves.

Gold reserves, however, rose by $340,000,000, bringing their total worth to $38,644,000,000.

As of the end of the reporting week, SDRs were down $63 million at $17.719 billion, but the country's reserve position at the IMF was up $8 million at $4.91 billion.