India’s foreign exchange reserves lasted for the second week, down $3.06 billion to $696.67 billion
India’s foreign exchange reserves fell by $3.06 billion to $696.67 billion in the week ended July 11, according to official data released by the Reserve Bank of India (RBI). This marks a second straight week of decline. In the last week of July 4, the country’s foreign exchange reserves fell by $30.49 billion to $69.736 billion.
The main component of foreign exchange reserves is foreign exchange assets, which fell by $2.47 billion to $588.881 billion in the week ended July 11, which may be the main reason for the decline in foreign exchange reserves.
Gold reserves, another major component of foreign exchange, also fell sharply by $498 million to $84.34 billion.
The country’s special drawing rights (SDR) with the International Monetary Fund (IMF) in the global financial institution, fell by $66 million to $1880.2 billion in the week ended on July 11, according to the Reserve Bank of India. According to the Reserve Bank of India, during the reporting week on July 11, there were $6 million to $1.8802 billion. The data added that the IMF reserve positions also fell by $24 million.
Central banks around the world are increasingly accumulating sheltered payments in foreign exchange reserves, and India is no exception. Since 2021, the Reserve Bank of India (RBI) has nearly doubled its share of gold in its foreign exchange reserves.
In 2023, India increased its foreign exchange reserves by about $58 billion, while its cumulative decline in 2022 was $71 billion. In 2024, reserves increased by more than $20 billion and hit an all-time high of $704.885 billion by the end of September 2024.
Governor Sanjay Malhotra announced that India’s foreign exchange reserves (forex) are sufficient to meet 11 months of imports, with about 96% of foreign debt.
The RBI governor is resilient to India’s external sectors, and key indicators of external sector vulnerability are improving.
Foreign exchange reserves or foreign exchange reserves are assets held by a country’s central bank or monetary authorities, mainly used in reserve currencies such as the US dollar, the euro, the Japanese yen and the British pound in small quantities.
To prevent a sharp drop in the rupee, the Reserve Bank of India often intervenes through liquidity management, including the sale of US dollars. When the rupee is strong, the RBI strategically bought the dollar and sold it when the rupee is weak.
Input with ANI
