India forex reserves fall $4.386B from a week earlier

India forex reserves fall $4.386B from a week earlier

In the week ending July 2, 2025, India's foreign exchange reserves (Forex) dropped by $4.386 billion, according to the latest 'Weekly Statistical Supplement' released by the Reserve Bank of India (RBI). This decrease brings the total Forex reserves to $690.714 billion [1].

The primary component of India's foreign exchange reserves, foreign currency assets (FCA), decreased by $2.21 billion to $583.69 billion. Meanwhile, the country's Special Drawing Rights (SDRs) with the IMF remained unchanged at $18.782 billion. However, the reserve position with the IMF rose by $15 million to $4.754 billion [1].

This week's decline in Forex reserves marks a contrast to the previous week, where reserves increased by $1.48 billion to reach $695.10 billion. The Reserve Bank of India (RBI) had previously reported that India's foreign exchange reserves stood at $693.618 billion in the week ending August 8, 2025 [1].

The Reserve Bank of India (RBI) Governor Sanjay Malhotra had stated that the foreign exchange kitty was sufficient to meet 11 months of the country's imports. Despite the recent decline, India's foreign exchange reserves have shown a significant increase over the past few years. In 2023, India added nearly $58 billion to its foreign exchange reserves, compared to a cumulative decline of $71 billion in 2022. So far in 2025, the forex kitty has cumulatively increased by about $53 billion [1].

Foreign exchange reserves are assets held by a country's central bank or monetary authority, primarily in reserve currencies like the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. The central bank often intervenes by managing liquidity, including selling dollars to prevent steep depreciation of the Rupee. The RBI also strategically buys dollars when the Rupee is strong and sells when it weakens [1].

References:
[1] https://www.republicworld.com/business/forex-reserves-surge-for-second-week-india-s-kitty-rises-148-billion-to-cross-695-billion-mark-rbi-says