India’s foreign exchange reserves fell by $1.781 billion in the week ending February 28, bringing the total to $638.698 billion, latest data from the Reserve Bank of India (RBI) revealed.
The country’s forex reserves have been on a volatile trajectory, touching an 11-month low after nearly four continuous months of declines. While some weeks have seen gains, others have recorded fresh dips.
Reserves have been falling since reaching an all-time high of $704.89 billion in September, marking a nearly 10 per cent drop from their peak. Analysts suggested that the recent decline is likely due to the RBI’s intervention to stabilise the Rupee, which remained near its all-time low against the US dollar.
India’s foreign currency assets (FCA) stood at $543.350 billion, while gold reserves amounted to $73.272 billion, as per data by the apex bank. Estimates also indicated that the reserves are sufficient to cover about 10–11 months of projected imports.
In 2023, India added approximately $58 billion to its forex reserves, reversing the $71 billion decline seen in 2022. So far in 2024, the reserves have grown by just over $20 billion.
The RBI manages forex reserves to stabilise the Rupee, often selling dollars to curb depreciation and buying when the Rupee strengthens. The reserves, majorly held in US dollars, also include smaller holdings in the Euro, Japanese Yen, and Pound Sterling.