India’s forex reserves slump by $11.17 billion in steepest fall ever

India’s foreign exchange (forex) reserves dipped by $11.17 billion in the week ended April 1, the steepest weekly fall ever, due to a sharp plunge in foreign currency assets, the Reserve Bank of India (RBI) data showed.

According to the RBI’s weekly statistical supplement, India’s forex reserves slumped by $11.173 billion to $606.475 billion for the week ended April 1. This is the highest decline in the country’s forex reserves ever.

This is the fourth consecutive week of decline in the country’s forex reserves as the RBI continues to intervene in the currency markets by way of dollar sales to prevent a slide in the value of the rupee amid the Russia-Ukraine conflict.

India’s forex reserves had declined by $2.03 billion to $617.648 billion during the week ended March 25.

The forex reserves have declined by over $26 billion in the past four weeks for which the official data is available.

The biggest drop has been in the country’s foreign currency assets. India’s foreign currency assets dipped by $10.727 billion to $539.727 billion during the week ended April 1, 2022.

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The foreign currency asset is the biggest component of the forex reserves. Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-dollar currencies like the euro, UK’s pound sterling and the Japanese yen held in the foreign exchange reserves.

The value of gold reserves dropped by $507 million to $42.734 billion during the week under review.

The other two components of the forex reserves increased marginally. The value of India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) rose by $58 million to $18.879 billion.

India’s reserve position in the IMF rose by $4 million to $5.136 billion during the week ended April 1, the RBI data showed.

• India