India’s foreign exchange (forex) reserves fell by $1.18 billion to $695.49 billion in the week ending July 18, as per the latest data from the Reserve Bank of India (RBI) released on Friday.
This is the second week in a row that the reserves have dropped. In the week before, they had fallen by $3.06 billion. Earlier in September 2024, the reserves had reached an all-time high of $704.89 billion.
The latest fall was mainly because of a drop in foreign currency assets, which went down by $1.20 billion to $587.61 billion. These assets make up the largest share of India’s forex reserves and are influenced by changes in major global currencies like the euro, pound, and yen.
On a positive note, India’s gold reserves increased by $150 million, reaching $84.50 billion.
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Other components of the reserves also saw slight decreases:
- Special Drawing Rights (SDRs) with the IMF dropped by $119 million to $18.68 billion
- India’s reserve position with the IMF fell by $13 million to $4.70 billion
Why Forex Reserves Matter
Forex reserves help protect the country from global economic shocks like rising oil prices, currency fluctuations, or financial market instability. They are also used to support the value of the Indian Rupee, pay for imports, and maintain financial stability.
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The RBI manages these reserves carefully and provides updates every week through its Weekly Statistical Supplement.
