India's Forex Reserves Decline by $5 Billion to $721 Billion

India's forex reserves decreased by $5.01 billion to $721.02 billion for the week ended October 16.

This decline follows an $8.58 billion drop in the previous week, continuing a downward trend since early September.

Experts attribute the sharp decline to the deployment of FCNR(B) resources and the RBI's currency defence through dollar sales.

Foreign currency assets, a major component, fell by $5.76 billion to $591.85 billion.

Conversely, the value of gold reserves increased by $706 million to $105.8 billion during the same period.

 

India's forex reserves dropped by $5.01 billion to $721.02 billion during the week ended October 16, the Reserve Bank of India said on Friday.

In the previous reporting week, the kitty declined by $8.58 billion to $726.03 billion.

The reserves touched an all-time high of $785.71 billion for the week ended September 4, driven by heavy greenback inflow as part of a special concessional swap for deposits from the diaspora through which banks raised a record nearly $133 billion but have been on a declining trend ever since.

Experts attribute the sharp decline in the kitty to deployment of FCNR(B) resources and currency defence put up by the RBI through dollar sales.

For the week ended October 16, foreign currency assets, a major component of reserves, decreased by $5.76 billion to $591.85 billion, according to the data released by the Reserve Bank of India (RBI).

Expressed in dollar terms, the foreign currency assets include effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in foreign exchange reserves.

The value of gold reserves rose $706 million to $105.8 billion during the week, the central bank said.

The Special Drawing Rights (SDRs) were up by $30 million to $18.58 billion, it added.

India's reserve position with the IMF increased by $11 million to $4.79 billion.