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Foreign exchange reserves of India fall for second straight week

Mumbai: Foreign exchange reserves of India declined for second week in a row. The Weekly Statistical Supplement released by the Reserve Bank of India (RBI) revealed this. As per RBI data, the reserves declined by $4.34 billion  to $589.14 billion in the week ended on May 26. Reserves had fallen by $6.05 billion in the week ended May 19. This was the biggest fall in more than three months.

In the week ended on May 12, the overall reserves had increased by $3.5 billion to $599.529 billion. This was their highest level since early June. Forex reserves surged by$7.196 billion to $595.976 billion in the week ended on May 5. In October 2021, the country’s forex kitty had reached an all-time high of USD 645 billion. The reserves have been declining as RBI deploys the kitty to defend the rupee amid pressures caused majorly by global developments.

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The foreign exchange reserves of the country comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the country’s reserve position with the International Monetary Fund (IMF). FCA is the largest component of the forex reserves. It includes the effect of appreciation or depreciation of non-US currencies like the euro, pound, and yen held in the foreign exchange reserves.

FCA dipped by $4.014 billion to $520.931 billion during the May 26th week. In the previous week, FCA fell by $4.654 billion. Gold  reserves declined by $225 million to $44.902 billion. SDRs contracted by $84 million to $18.192 billion. The reserve position at IMF dropped by $17 million to $5.113 billion.


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