India’s forex reserves decline by $6.92 billion in a week

India’s foreign exchange reserves declined by $6.92 billion to $695.36 billion for the week ending October 24, according to the latest data released by the Reserve Bank of India (RBI) on Friday.In the previous week, the reserves had risen by $4.496 billion to a record $702.28 billion, mainly due to an increase in the value of gold holdings. The decline in the most recent week reflects changes across major reserve components, including foreign currency assets and gold reserves.For the week ended October 24, foreign currency assets (FCA), which constitute the largest share of the reserves, fell by $3.862 billion to $566.548 billion. Expressed in dollar terms, these assets include the impact of appreciation or depreciation of non-US currencies such as the euro, pound, and yen held in the foreign exchange reserves.
The value of gold reserves also declined sharply by $3.01 billion to $105.536 billion during the week, the RBI data showed. Meanwhile, the Special Drawing Rights (SDRs) decreased by $58 million to $18.664 billion.India’s reserve position with the International Monetary Fund (IMF), however, recorded a slight increase of $6 million, reaching $4.608 billion during the reporting week, according to information.
The Reserve Bank of India continues to closely monitor developments in the foreign exchange market and undertakes interventions when necessary to maintain orderly market conditions. Such actions, the central bank emphasized, are aimed at reducing undue volatility in the rupee’s exchange rate rather than targeting any specific level or band.Despite the recent dip, India’s forex reserves remain robust, providing a strong cushion against external shocks and ensuring stability in the broader financial system, noted experts.

(Business Correspondent)