India’s forex reserves drop $8 billion to $688.894 billion

India’s foreign exchange reserves declined by $8.094 billion to $688.894 billion during the week ended May 15, according to data released by the Reserve Bank of India on Friday.
The fall comes after the country’s forex reserves had increased by $6.295 billion to $696.988 billion in the previous week ended May 8.
India’s forex kitty had touched an all-time high of $728.494 billion during the week ended February 27 before coming under pressure following the escalation of the West Asia conflict, which triggered volatility in global markets and weakened the rupee.The pressure on the Indian currency prompted the RBI to intervene in the foreign exchange market through dollar sales to stabilise the rupee.
Prime Minister Narendra Modi has also made repeated public appeals since May 11 urging citizens to conserve foreign exchange by reducing foreign travel, limiting fuel consumption and avoiding gold purchases for a year.
According to the RBI data, foreign currency assets (FCAs), which form the largest component of the reserves, declined by $6.483 billion to $545.904 billion during the reporting week.Foreign currency assets expressed in dollar terms include the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.Gold reserves also registered a decline, falling by $1.536 billion to $119.317 billion during the week.
The value of Special Drawing Rights (SDRs) with the International Monetary Fund declined by $49 million to $18.824 billion, the RBI said.India’s reserve position with the International Monetary Fund also slipped by $25 million to $4.85 billion during the reporting week.
Despite the recent decline, India continues to maintain one of the world’s largest foreign exchange reserve buffers, which provides support against external shocks and currency volatility.

(Business Correspondent)