Foreign exchange reserves of India decline for second week

Mumbai: India’s foreign exchange reserves declined for second  week in a row. Forex reserves fell by $10.746 billion to $690.43 billion during the week ended October 11. This is one of the largest decreases in India’s forex reserves in recent times. The Weekly Statistical Supplement released by the Reserve Bank of India (RBI) revealed this.

In the previous reporting week, the reserves had  declined by $3.709 billion to $701.176 billion. In the week ended on September 27, the reserves had jumped by $12.588 billion to an all-time high of $704.885 billion. In the previous week ended September 20, the forex reserves jumped by $2.8 billion to $692.3.

India’s forex reserves jumped $223 million to a fresh all-time high of $689.458 billion for the week ended September 13. The forex kitty had jumped by $5.248 billion to a record $689.235 billion for the previous reporting week. In nearly a month between August 9 and September 13, India’s foreign exchange rose by 2.88 per cent from $670.119 billion to $689.458.

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Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.

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.

For the week ended October 11, foreign currency assets, a major component of the reserves, decreased by $10.542 billion to $602.101 billion. Gold reserves decreased by $98 million to $65.658 billion during the week ended on October 11. The special drawing rights (SDRs) were down by $86 million to $18.339 billion. India’s reserve position with the IMF was down by $20 million to $4.333 billion in the reporting week.