India’s foreign exchange (forex) reserves fell sharply by $8.09 billion to $688.89 billion in the week ended May 15, according to data released by the Reserve Bank of India on Friday. The decline comes after the country’s forex kitty had risen by $6.29 billion to $696.99 billion in the previous reporting week ended May 8.
India’s reserves had touched an all-time high of $728.49 billion in the week ended February 27 this year. However, reserves have witnessed sustained pressure since the outbreak of the Middle East conflict, which triggered volatility in global markets and weighed on the rupee. The RBI has been intervening in the currency market through dollar sales to curb excessive depreciation in the domestic currency.
According to the RBI data,
foreign currency assets (FCAs), which form the largest component of the forex reserves, declined by $6.48 billion to $545.90 billion during the reporting week.
Expressed in dollar terms, FCAs include the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
Gold reserves also saw a decline, falling by $1.54 billion to $119.32 billion during the week.
The country’s Special Drawing Rights (SDRs) with the International Monetary Fund declined by $49 million to $18.82 billion.
India’s reserve position with the IMF also dipped by $25 million to $4.85 billion in the reporting week, the central bank data showed.
Prime Minister Narendra Modi has also made repeated public appeals since May 11 urging citizens to help conserve foreign exchange reserves by reducing foreign travel, cutting fuel consumption and avoiding gold purchases for one year.
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