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India's forex reserves dip by $2.69 billion: What's behind the decline?

By · Via Times of India · Published by Everything Blog

In short

The weekly downturn reduced the aggregate stockpile to $717.056 billion, which translates to Rs 68.09 lakh crore in domestic currency terms. Foreign currency assets accounted for the bulk of the drop, falling alongside gold holdings and Special Drawing Rights. However, India's reserve position with the International Monetary Fund bucked the downward trend by recording a marginal gain of $3 million to reach $4.790 billion.

Key points

  • Total foreign exchange reserves fell by $2.691 billion, or Rs 24,777 crore, for the week…: Total foreign exchange reserves fell by $2.691 billion, or Rs 24,777 crore, for the week ended October 30.
  • India's reserve position with the International Monetary Fund expanded slightly to $4.790…: India's reserve position with the International Monetary Fund expanded slightly to $4.790 billion.
  • Long-term reserves remain structurally elevated, showing an annual gain of $27.324 billio…: Long-term reserves remain structurally elevated, showing an annual gain of $27.324 billion compared to the previous year.

Sources checked by our analysis pipeline: 1

NEW DELHI: India's foreign exchange reserves took a hit in the week ended October 30, falling by $2.691 billion to $717.056 billion, according to the latest data released by the

Reserve Bank of India (RBI) on Friday.

The decline was largely driven by a drop in two key components of the country's reserves, foreign currency assets and gold holdings, which together make up the bulk of the forex kitty.

While foreign currency assets and gold reserves fell, India's reserve position with the International Monetary Fund (IMF) recorded a marginal increase.

Special Drawing Rights (SDRs), meanwhile, also saw a decline during the week.

Foreign currency assets, the biggest part of India's foreign exchange reserves, declined by $2.088 billion to $591.118 billion during the reporting week.

Gold reserves also fell by $559 million, taking their value to $102.591 billion.

The decline was not limited to these two components. India's SDR holdings, which are reserve assets allocated by the IMF, dropped by $47 million to $18.558 billion.

However, the country's reserve position with the IMF increased by $3 million to $4.790 billion.

The…

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