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Foreign exchange reserves of India decline to 6 month low

Mumbai: Foreign exchange reserves  of India touched six months low, in the week ended December 13. The forex reserves fell by $1.988 billion to $652.869 billion during the week. The reserves fell to their lowest since June 28. The Weekly Statistical Supplement released by the Reserve Bank of India (RBI) revealed this.

The reserves stood at $655 billion in the week ended December 6. In the previous reporting week, the reserves had declined by Rs 3.235 billion to Rs 654.857 billion, and have declined by $52 billion from the record high of $704.89 billion hit on September 27.

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.

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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.

Foreign Currency Assets (FCA) fell by $3.047 billion to Rs 562.576 billion in the week ended December 13.On the other hand, gold reserves increased by $1.121 billion to $68.056 billion. Additionally, the special drawing rights (SDRs) were down $35 million to $17.997 billion.India’s reserve position with the International Monetary Fund (IMF) was also down $27 million to $4.240 billion in the reporting week.

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