In a significant financial development, India’s foreign exchange reserves saw a substantial decline of $2.17 billion, resulting in the total reserve amounting to $584.74 billion as reported by the Reserve Bank of India (RBI) on Friday. This marks a continuation of the decreasing trend in the nation’s forex holdings.
It is noteworthy that in October 2021, India’s forex reserves had impressively reached an all-time high of $645 billion. However, the subsequent decrease in reserves can be attributed to the strategic use of these funds by the central bank to safeguard the Indian rupee amidst the mounting pressures arising predominantly from global economic dynamics in the past year.
During the week ending on October 6, 2023, the foreign currency assets, a pivotal component of the country’s forex reserves, witnessed a decrease of $707 million, resulting in a total of $519.529 billion, as disclosed by the Weekly Statistical Supplement provided by the RBI. These foreign currency assets encompass fluctuations related to the exchange rates of non-US currencies like the euro, pound, and yen that are held within the foreign exchange reserves.
Additionally, the gold reserves saw a significant dip of $1.425 billion, bringing the total gold reserve to $42.306 billion, as per the Reserve Bank of India’s announcement. The Special Drawing Rights (SDRs) also saw a decrease of $15 million, reaching $17.923 billion, according to the apex bank’s statement.
Moreover, India’s reserve position with the International Monetary Fund (IMF) witnessed a decline of $19 million, resulting in a total reserve position of $4.983 billion during the reporting week, as confirmed by the central bank’s data.
These developments in India’s forex reserves hold critical implications for the country’s economic stability and resilience in the face of global financial challenges.
