India Forex Reserves Fall $11.4 Billion To $698.3 Billion In Latest Week

India’s foreign exchange reserves declined during the week ended March 20, 2026, according to data released by the Reserve Bank of India. The overall reserves fell by $11.4 billion to $698.3 billion, marking a notable weekly drop.

The decline was primarily attributed to a significant reduction in gold reserves. Despite this, foreign currency assets, the largest component of reserves, recorded an increase during the period.

Breakdown Of Reserve Components

Foreign currency assets rose by $2.1 billion to $557.7 billion, providing partial support to the overall reserves. However, gold reserves saw a sharp decline of $13.5 billion to $117.2 billion, which offset gains in other components.

Special Drawing Rights (SDRs) declined marginally by $65 million to $18.6 billion. Meanwhile, India’s reserve position in the International Monetary Fund increased by $19 million to $4.8 billion.

Weekly And Historical Trends

In the previous reporting week, reserves had already declined by $7.052 billion to $709.759 billion. The recent drop continues a trend of short-term volatility in reserve levels.

Earlier, reserves had reached an all-time high of $728.494 billion in the week ended February 27, 2026. This peak was recorded before the escalation of tensions in West Asia, which has since influenced global financial conditions.

Year-On-Year Position and External Buffer

On a year-on-year basis, India’s forex reserves have increased by $39.5 billion. This indicates a broader strengthening of the country’s external buffer despite recent fluctuations.

Higher reserves generally support currency stability and provide a cushion against external shocks. The data suggests that while weekly movements may vary, the overall reserve position remains relatively strong over a longer period.

Liquidity Conditions And RBI Operations

The RBI also conducted liquidity operations during the period, injecting funds at a cut-off rate of 5.26% and a weighted average rate of 5.29%. The total liquidity infused was lower than the notified amount of ₹75,000 crore.

This occurred despite a reduction in surplus liquidity due to advance tax payments and GST-related outflows. These factors have contributed to tighter liquidity conditions in the banking system.

Read More: India’s Economy to Expand by 7.6% in FY26.

Conclusion

India’s forex reserves recorded a significant weekly decline driven mainly by a sharp fall in gold holdings. Gains in foreign currency assets provided limited offset to the overall drop.

While short-term volatility persists, the year-on-year increase reflects underlying strength in external reserves. The data highlights the combined impact of global developments and domestic liquidity conditions on reserve movements.

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