India’s foreign exchange reserves experienced a decline of $3.471 billion, reaching $667.386 billion during the week ended July 26, according to the latest data from the Reserve Bank of India (RBI). This follows a significant increase in the previous week, where the forex reserves had surged by $4.003 billion to an all-time high of $670.857 billion.
Foreign Currency Assets
Foreign currency assets, which constitute a substantial portion of the reserves, saw a reduction of $1.171 billion, bringing the total to $586.877 billion. These assets are valued in dollar terms and account for the fluctuations in the value of non-US currencies like the euro, pound, and yen held in the reserves.
Gold Reserves
Gold reserves also saw a notable decrease, dropping by $2.297 billion to $57.695 billion during the week.
Special Drawing Rights (SDRs)
Special drawing rights (SDRs) experienced a slight dip, decreasing by $5 million to $18.202 billion.
IMF Reserve Position
In contrast, India’s reserve position with the International Monetary Fund (IMF) saw a modest increase of $2 million, reaching $4.612 billion in the reporting week.
Sanjeev Agrawal, president of PHD Chamber of Commerce and Industry, said, “Amidst the growing geopolitical uncertainties, India has maintained its resilience on the back of prudent policy measures and vigilant monetary policy stance.”
This has led India to maintain a stable stance on the FOREX at the level of $667 billion (as on July 26, 2024), he added.
“This will strengthen India’s economic growth trajectory, enhancing its standing internationally, making the country more attractive to foreign investors, and fostering domestic trade and industry,” Agrawal said.
The Reserve Bank of India would have more flexibility in handling the currency and monetary policy given the country’s significant foreign exchange reserves, Agrawal added.
