INDIA’S FOREX RESERVES DIP BY $1.31 BILLION TO $656.5 BILLION

India’s foreign exchange reserves declined by USD 1.31 billion to USD 656.582 billion for the week ending November 22, according to the Reserve Bank of India (RBI). This follows a significant drop of USD 17.761 billion in the previous week, bringing the total reserves down from the record-high USD 704.885 billion reached in September.

Key Components of the DeclineForeign Currency Assets (FCA), a key component of India’s forex reserves, fell by $3.043 billion to $566.791 billion, reflecting changes in the valuation of non-US currencies like the euro, pound, and yen against the dollar. Meanwhile, gold reserves rose by $1.828 billion to $67.573 billion. Special Drawing Rights (SDRs) declined by $79 million to $17.985 billion, and India’s reserve position with the International Monetary Fund (IMF) decreased by $15 million to $4.232 billion.

The consistent decline in forex reserves comes amid mounting pressure on the rupee, which has been affected by global economic uncertainties and fluctuations in currency valuations. The reserves had previously reached an all-time high of USD 704.885 billion in September but have seen a downward trajectory in recent weeks.

Implications

The fluctuation in reserves is attributed to shifts in foreign exchange assets, global market volatility, and changing valuations of reserve currencies. While gold reserves have offered a buffer, the overall decline signals challenges in maintaining forex stability.

As India navigates these pressures, the RBI’s monitoring and interventions will play a critical role in stabilizing the economy and currency market.

2024-11-29T17:27:39Z