Mumbai: The foreign exchange (forex) reserves of the country witnessed its steepest weekly fall in 6 months. In the last week it touched its 2-year low. The weekly statistical supplement data released by Reserve Bank of India (RBI) revealed this.
The country’s forex reserves declined by $8.134 billion to $537.518 billion for the week ended September 23. The country’s reserves were $545.65 billion at the end of the previous week. The forex reserves slipped down below $550 billion for the first time in nearly 2 years in last week. This is the 8th week in a row that the forex reserve is declining. It has reached their lowest levels since August 2020.
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The weakening of the domestic currency is the main reason for this. India’s forex has fallen for 25 of the 31 weeks since Russia invaded Ukraine in late February. India lost around $95 billion during this period. India’s forex reserves are the fourth largest globally.
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 declined by $7.688 billion to $477.212 billion. The value of the gold reserves fell by $300 million to $37.886 billion. The Special Drawing Rights (SDRs) decreased by $93 million to $17.594 billion and the country’s reserve position with the IMF fell by $54 million to $4.826 billion.
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