India's Forex Reserves Experience Significant Decline

Forex Reserves Drop Significantly

According to the Reserve Bank of India (RBI), India's foreign exchange reserves fell by $5.654 billion, bringing the total to $666.933 billion for the week ending June 26. In the prior week, reserves had increased by $963 million, reaching $672.587 billion. Earlier this year, reserves peaked at a record high of $728.494 billion during the week ending February 27, before the West Asia conflict triggered a series of declines as the rupee faced pressure, prompting the RBI to sell dollars in the forex market.

Since May 11, Prime Minister Narendra Modi has urged citizens to conserve foreign exchange by reducing foreign travel, limiting fuel consumption, and postponing gold purchases for a year. For the week ending June 26, foreign currency assets, which are a key part of the reserves, decreased by $150 million to $541.067 billion, as reported by the central bank. These assets reflect the value fluctuations of non-US currencies like the euro, pound, and yen.

Additionally, the value of gold reserves dropped by $5.394 billion to $102.536 billion. The special drawing rights (SDRs) also saw a decline of $89 million, totaling $18.558 billion. Furthermore, India's reserve position with the International Monetary Fund (IMF) decreased by $21 million, amounting to $4.772 billion at the end of the reporting week.