Significant Drop in India's Foreign Exchange Reserves

India's foreign exchange reserves have seen a significant decline of nearly $10 billion, primarily driven by a sharp drop in gold holdings. The latest figures from the Reserve Bank of India reveal that the total reserves now stand at $671.625 billion. While foreign currency assets showed a modest increase, other components like Special Drawing Rights also experienced slight declines. This article delves into the factors contributing to the overall decrease and the implications for India's financial landscape.

By Narendra Chaudhary Jun 19, 2026, 19:15 IST

India's Forex Reserves Experience Notable Decline

During the week ending June 12, India's foreign exchange reserves saw a substantial decrease of nearly $10 billion, primarily due to a significant reduction in gold holdings, as reported by the Reserve Bank of India (RBI) on Friday. The latest data indicates that the forex reserves have dropped to $671.625 billion, reflecting a decline of $9.985 billion from the previous week. This follows a smaller decrease of $711 million noted in the earlier reporting period, where reserves were at $681.610 billion.

A key contributor to this decline was the sharp fall in the value of gold holdings. The RBI's data revealed that gold reserves plummeted by $10.754 billion during the week, reducing the total value of the country's gold reserves to $103.821 billion. This significant drop in gold reserves overshadowed any gains made in other components of the foreign exchange reserve portfolio, leading to the overall decrease.

Foreign Currency Assets Show Some Resilience

Despite the overall decline in reserves, foreign currency assets (FCAs), which represent the largest portion of India's forex reserves, experienced a slight increase during the week. The central bank reported that FCAs rose by $846 million, reaching $544.290 billion. These assets are affected not only by direct foreign currency holdings but also by fluctuations in the values of non-US currencies like the euro, pound sterling, and Japanese yen when converted to US dollar terms. Consequently, changes in global currency markets can influence the valuation of India's foreign currency assets without altering the actual holdings.

Other components of the reserves also saw minor declines during the reporting week. The value of Special Drawing Rights (SDRs), an international reserve asset established by the International Monetary Fund (IMF), decreased by $66 million to $18.699 billion. Additionally, India's reserve position with the IMF experienced a slight drop, with the country's reserve tranche position declining by $11 million to $4.815 billion.