India Sees $2.16 Bn Decline in Foreign Exchange Reserves

The Reserve Bank of India’s statistical supplement, released on Friday, indicated that India’s foreign exchange reserves, which had reached their highest point in over nine months, have declined to $584.25 billion for the week ending on April 21.

India’s Foreign Exchange Reserves dropped by $2.16 billion from the previous week after increasing by nearly $8 billion in the preceding two weeks. The Forex reserves stood at $586.412 billion in the prior reporting week, reflecting a rise of $1.657 billion.

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India’s Foreign Exchange Reserves, which had recently reached their highest levels in over nine months, decreased to $584.25 billion for the week ending April 21, according to the Reserve Bank of India’s statistical supplement released on Friday. It should be noted that in October 2021, the reserves had hit a record high of $645 billion. The central bank has been deploying the reserves to support the rupee, which has come under pressure due to global events.

The Reserve Bank of India’s data revealed that India’s foreign currency assets, which account for a substantial portion of its foreign exchange reserves, fell by $2.146 billion to $514.489 billion for the week ended April 21. The figures reflect the effect of fluctuations in the value of non-US currencies like the euro, pound, and yen held in the reserves when converted to US dollars.

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The Reserve Bank of India has reported that India’s gold reserves fell by $24 million to $46.151 billion, while Special Drawing Rights (SDRs) rose by $19 million to $18.431 billion. The RBI frequently intervenes in spot and forward currency markets to avoid significant changes in the rupee’s value, and shifts in Forex reserves’ value may also occur due to changes in their valuation.

During the week ending on April 28, the Indian rupee closed at 81.8250 against the US dollar, representing a 0.33% gain. This followed a four-week rising streak, during which the currency traded within a narrow range of 81.8775 to 82.2425 against the greenback.