India’s foreign exchange (forex) reserves declined by 160 million to $635.66 billion due to a sharp drop in foreign currency assets, the Reserve Bank of India (RBI) data showed on Friday.
This is the third consecutive week of decline in the country’s forex reserves. The forex reserves had dropped by $77 million during the week ended December 10.
India’s forex reserves touched an all-time high of $642.45 billion in the week ended September 3, 2021.
Reason for current drop
During the reporting week ended December 17, the dip in the forex kitty was on account of a decline in foreign currency assets (FCAs), a major component of the overall reserves.
Foreign Currency Assets
The foreign currency assets dipped by $645 million to $572.21 billion during the week ended December 17, 2021, as per the RBI’s weekly statistical supplement.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold Reserves and Position with IMF
The value of gold reserves rose by $475 million to $39.18 billion. Reserve position with the International Monetary Fund (IMF) increased by $9 million to $5.17 billion.
There was no change in the special drawing rights (SDRs). It remained unchanged at $19.08 billion.
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