RBI data shows a $2.54 billion decline in forex reserves after weeks of steady growth
India’s foreign exchange reserves fell by $2.54 billion to $635.721 billion for the week ending on February 14, breaking a three-week streak of continuous gains, as per data released by the Reserve Bank of India (RBI) on Friday, reported timesofindia.indiatimes.com.
The decline comes after a significant rise of $7.654 billion in the previous week, pushing reserves to $638.261 billion
The dip in forex reserves follows RBI’s ongoing interventions to manage currency volatility. India’s foreign exchange reserves had reached a record high of $704.885 billion in September last year before declining due to measures taken to stabilize the rupee.
Breakdown of Reserve Components
According to the latest RBI report:
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Foreign Currency Assets (FCA): The largest portion of India’s forex reserves dropped by $4.515 billion to $539.591 billion. These assets, expressed in dollar terms, also reflect changes due to the valuation of other global currencies like the euro, pound, and yen.
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Gold Reserves: Increased by $1.942 billion to reach $74.15 billion, providing a buffer against the decline in foreign currency assets.
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Special Drawing Rights (SDRs): Rose by $19 million, bringing the total to $17.897 billion.
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Reserve Position with the IMF: Saw a marginal increase of $14 million to $4.083 billion.
India’s foreign exchange reserves serve as a crucial financial cushion for the economy, helping manage external shocks and stabilize the currency. Despite the recent decline, the reserves remain at historically high levels.
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