India’s Forex Reserves Drop $4.11 Billion to $640.27 Billion

India’s foreign exchange reserves dropped by $4.11 billion to $640.279 billion as of December 27, 2024. This was the fourth straight weekly fall in reserves maintained with the Reserve Bank of India.

Reserves Declined Last Week

In the previous week, India’s total reserves decreased by $8.478 billion, reaching $644.391 billion. As per news reports the decline has been ongoing for several weeks, mainly due to revaluation and the Reserve Bank of India’s interventions in the forex market to stabilise the rupee’s volatility.

According to news reports, the RBI often steps in to manage market liquidity, including selling dollars, to prevent a sharp decline in the rupee’s value.

Decline in Foreign Currency Assets

As of December 27, foreign currency assets, which make up a significant portion of the reserves, fell by $4.641 billion to $551.921 billion, according to the data released on Friday.

These assets are influenced not only by the RBI’s market actions but also by the appreciation or depreciation of non-US dollar currencies, such as the euro, pound, and yen, which are part of the reserves.

Uptick in Gold Reserves

During the week, India’s gold reserves rose by $541 million, reaching $66.268 billion, as per the RBI. Meanwhile, Special Drawing Rights (SDRs) decreased by $12 million to $17.873 billion. India’s reserve position with the IMF remained steady at $4.217 billion, according to the central bank’s data.

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