India's Forex Reserves Fell By USD 1.268 Billion to USD 561.583 Billion
The Reserve Bank of India reported that India's currency reserves fell by USD 1.268 billion to USD 561.583 billion in the week ending January 6. Following two weeks of decline, total reserves climbed by USD 44 million to USD 562.851 billion in the preceding reporting week. The country's foreign exchange reserves hit an all-time high of USD 645 billion in October 2021.
The reserves have been dwindling as the central bank utilized them to safeguard the currency against global market pressures. According to the RBI's Weekly Statistical Supplement, foreign currency assets (FCA), a major component of overall reserves, fell by USD 1.747 billion to USD 496.441 billion during the week ending January 6.
Foreign exchange reserves are assets in foreign currencies kept in reserve by a central bank, such as bonds, treasury bills, and other government securities. It is important to highlight that the vast bulk of foreign exchange reserves is stored in US dollars.
India's foreign exchange reserves comprise the following:
- Foreign Currency Holdings
- Reserves of gold
- SDRs are Special Drawing Rights (SDR)
- International Monetary Fund reserve position (IMF)
The effect of appreciation or depreciation of non-US units such as the euro, pound, and yen held in foreign exchange reserves is included in the foreign currency assets.
The value of gold reserves rose from USD 461 million to USD 41.784 billion. The Special Drawing Rights (SDRs) increased by USD 35 million to USD 18.217 billion, according to the apex bank. The country's reserve position with the International Monetary Fund (IMF) fell by USD 18 million in the reporting week to USD 5.141 billion, according to the statistics.