India’s foreign exchange reserves witnessed a significant decline of USD 5.89 billion, settling at USD 617.3 billion for the week ending January 5, as revealed by the weekly data released by the Reserve Bank. This comes after a continuous four-week upward trend in reserves.
Throughout the current fiscal, the reserves have marked an overall increase of USD 55.72 billion, according to the Reserve Bank of India (RBI).
In the preceding week concluded on December 29, the reserves surged by USD 2.759 billion, reaching USD 623.2 billion, marking the highest point in the fiscal year.
The week prior to that also saw an uptick, with reserves rising by USD 4.471 billion to USD 620.441 billion. Notably, in October 2021, the forex reserves had achieved an all-time high at USD 645 billion.
The decline in reserves is attributed to the central bank’s intervention to safeguard the rupee amid pressures arising from global developments since the past year. Foreign currency assets, constituting the largest share of the reserves, contracted by USD 4.96 billion, settling at USD 546.65 billion.
Gold reserves also experienced a dip, decreasing by USD 839 million to USD 47.48 billion during the reported week. Additionally, the Special Drawing Rights (SDRs) witnessed a decline of USD 67 million, totaling USD 18.29 billion, as per the RBI.
In the same reporting week, the country’s reserve position with the International Monetary Fund (IMF) also saw a decrease of USD 26 million, closing at USD 48.66 billion.