India's foreign exchange reserves hit 10-month low amid economic slowdown

India's foreign exchange reserves fell for the fifth consecutive week to a 10-month low of $634.59 billion as of Jan. 3, data from the Reserve Bank of India (RBI) showed on Friday.

According to Reuters, the reserves declined by $5.7 billion in the reported week, after falling by a cumulative $17.8 billion in the prior three weeks. Reserves have fallen by about $70 billion from their all-time high of $704.89 billion in late September.

The rupee has faced persistent headwinds over recent weeks, as the dollar has strengthened and capital flows have slowed following a slowdown in India's economic growth.

The central bank has routinely intervened in the foreign exchange market via state-run banks to limit the rupee's losses.

The magnitude of the RBI's forex intervention since October has been "substantial" and is resulting in "adverse effects," such as tighter banking system liquidity and higher short-term rates at a time of weakening growth, Nomura analysts said.