India’s Forex Reserves Drop $1.98 Billion to $652.87 Billion

India’s foreign exchange reserves have dropped $1.98 billion, reaching a six-month low of $652.87 billion as of December 13, 2024.

The reserves had touched a record high in the week ending September 27, when they reached $705 billion.

Reserves Declined Last Week

For the previous week, reserves dropped by $3.24 billion, bringing them down from $654.86 billion in the week ending December 6, 2024, to $652.87 billion in the week ending December 13, 2024.

As per news reports, the decline in reserves is largely attributed to the revaluation of foreign currency assets and the Reserve Bank of India’s (RBI) interventions in the foreign exchange market.

Foreign Currency Assets See Significant Decline

RBI showed that the primary contributor to this decline was the drop in Foreign Currency Assets. A major component of the reserves, foreign currency assets, decreased by $3.05 billion to $562.58 billion.

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.

Gold Reserves Rise

However, there was a notable weekly increase in gold reserves, which rose by $1.12 billion to $68.06 billion.

On the other hand, Special Drawing Rights (SDRs) fell by $35 million to $17.99 billion, and India’s reserve position in the International Monetary Fund (IMF) declined by $27 million to $4.24 billion, for the week ending December 13, 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.