India’s forex reserves experienced a significant drop of $11.41 billion, primarily due to a decrease in gold reserves, raising concerns about the nation’s financial stability.
Illustration: Dado Ruvic/Reuters
Key Points
- India’s forex reserves decreased by $11.413 billion, reaching $698.346 billion.
- The decline was primarily driven by a significant decrease in the value of gold reserves.
- Foreign currency assets, a major component of the reserves, saw a slight increase.
- The value of gold reserves decreased by $13.495 billion to $117.186 billion.
- India’s reserve position with the IMF saw a slight increase in the reporting week.
India’s forex reserves dropped by $11.413 billion to $698.346 billion during the week ended March 20 due to a sharp decrease in gold reserves, the RBI said on Friday.
In the previous reporting week, the overall reserves had dropped $7.052 billion to $709.759 billion.
The kitty had expanded to an all-time high of $728.49 billion during the week ended February 27 this year, before the onset of the West Asia conflict.
Components of the Forex Reserves
For the week ended March 20, foreign currency assets, a major component of the reserves, increased by $2.13 billion to $557.69 billion, the central bank’s data showed.
Expressed in dollar terms, the foreign currency assets include effects of appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.
However, the value of gold reserves decreased by $13.49 billion to $117.19 billion during the week, the RBI said.
The Special Drawing Rights (SDRs) were down $65 million to $18.63 billion, the apex bank said.
India’s reserve position with the IMF was up by $19 million to $4.83 billion in the reporting week, according to the apex bank’s data.
