India Forex Reserves Fall $14.9 Billion To $765.9 Billion, Sharpest Weekly Drop Since Nov 2024

India’s foreign exchange reserves declined $14.9 billion to $765.9 billion in the week ended September 18, according to data released by the Reserve Bank of India on Friday. It was the steepest weekly fall in reserves since November 15, 2024.

Reserves stood at $780.8 billion in the preceding week ended September 11. Foreign currency assets, the largest component of India’s reserves, fell $14.8 billion to $631 billion during the week.

The dollar value of these assets also reflects changes in the value of currencies such as the euro, pound and yen held by the RBI.

The decline followed a sharp increase in reserves in recent weeks. Holdings had reached a record $785.7 billion in the week ended September 5, helped by foreign currency inflows through the RBI’s FCNR(B) deposit swap scheme.

Gold reserves rose $68 million to $111.3 billion, while special drawing rights declined $106 million to $18.7 billion. India’s reserve position with the IMF also fell $27 million to $4.9 billion.

RBI steps in amid rupee pressure

The latest fall comes as the rupee faces pressure from higher crude oil prices and US Treasury yields. The RBI has been using spot and forward market operations to manage excessive volatility in the currency.

The central bank has also used dollar-rupee sell/buy swaps to manage liquidity and support its foreign exchange operations.

Reserves had fallen to $666.9 billion in the week ended June 26 amid RBI dollar sales during the West Asia crisis. The subsequent recovery was supported significantly by the RBI’s concessional swap window, which mobilised $143.6 billion in foreign currency inflows through September 18.