India’s forex reserves slip from record high, down by over $2 billion, gold

The foreign exchange reserves, or forex reserves, of India dropped more than USD 2 billion to USD 646.673 billion in the week ended on May 24, according to data released by the Reserve Bank of India (RBI) on Friday.

In the prior week, the forex reserves had increased by USD 4.549 billion to all-time high USD 648.700 billion.

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India’s forex reserves’ last all-time high was in October 2021.

During the reporting week ended May 24, the foreign currency assets (FCA), the biggest component of the forex reserves, in the country fell by USD 1.510 billion to USD 567.499 billion, showed the RBI data.

Gold reserves stood at USD 56.713 billion, down by by USD 482 million.

So far this year, the forex reserves have grown about USD 28 billion on a cumulative basis.

As per a RBI report, the foreign exchange reserves are sufficient to cover around 11 months of projected imports of the country.

In 2023, the central bank had added about USD 58 billion to its foreign exchange kitty.

ALSO READ: India’s forex reserves decline for third consecutive week

In 2022, the forex kitty had fallen by USD 71 billion.

The central bank data also showed that India’s reserve position with the International Monetary Fund (IMF) declined by USD 1 million to USD 4.326 billion in the week ended on May 24.

The foreign currency assets are expressed in US dollar terms. They also include the effect of appreciation or depreciation of other currencies such as the euro, British pound and Japanese yen held in the foreign exchange reserves.

Indian Rupee

The Indian rupee closed lower by 13 paise at 83.42 against the US dollar on Friday.

The decline could be attributed to volatile domestic stock markets and month-end US dollar demand.

At the interbank foreign exchange market, the Indian rupee opened at 83.25 and oscillated between the intra-day high of 83.23 and lowest level of 83.49.

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