Forex Reserves Drop by $8.58 Billion to $726 Billion

India’s foreign exchange reserves have seen a significant drop of $8.58 billion, reaching $726.03 billion for the week ending October 9, continuing a downward trajectory from their record high in early September.

Illustration: Dado Ruvic/Reuters

India’s forex kitty dropped by $8.58 billion to $726.03 billion during the week ended October 9, the RBI said on Friday.

In the previous reporting week, the reserves had dropped by $12.95 billion to $734.61 billion.

Recent Trends in Reserves

The reserves had touched an all-time high of $785.71 billion for the week ended September 4, driven by a heavy flow of currency as part of a special concessional swap for deposits from the diaspora, through which banks raised a record sum of nearly $133 billion, but have been on a declining trend ever since.

For the week ended October 9, foreign currency assets, a major component of reserves, decreased by $7.14 billion to $597.61 billion, according to the data released by the Reserve Bank of India (RBI).

Components of the Decline

Expressed in dollar terms, the foreign currency assets include effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in foreign exchange reserves.

The value of gold reserves decreased by $1.32 billion to $105.09 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) were down by $109 million to $18.55 billion, the apex bank said.

India’s reserve position with the IMF decreased by $10 million to $4.78 billion, the RBI said.