India's foreign exchange reserves, having peaked at $314.62 billion in May, dropped by over $44 billion in the past two months.
Forex reserves have come down to around $250 billion, latest RBI figures indicate.
Pressure on forex reserves was felt more between September and October as foreign institutional investors (FIIs) took away about $6 billion from the market. Besides, imports rising at a faster pace than exports also took a toll on the country's forex pool.
Against over $80 billion import-export gap during the last fiscal, the deficit has reached close to $60 billion in the first half of 2008-09, as per official figures.
However, Chairman of Prime Minister's Economic Advisory Council Suresh Tendulkar is not perturbed over the sharp decline in forex reserves. As per his estimates, the credit for a swelling forex kitty also went to the booming share market early this year.
The depleting forex reserves because of capital outflows are also reducing the fiscal headroom for the government to increase public expenditure for reviving business confidence.
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