India's forex reserves decline to $684.8 billion in October
What's the story
India's foreign exchange (forex) reserves have declined by $3.4 billion, reaching $684.8 billion as of October 25, the Reserve Bank of India (RBI) data showed. This comes after a decline of $2.16 billion to $688.26 billion as of October 18. Despite the recent declines, India's forex reserves breached the historic $700 billion mark for the first time ever in October, making it among the world's top forex holders and ranking fourth globally.
FCA impact
Foreign currency assets contribute to forex reserves decline
The main reason for this decline, as per the RBI's Weekly Statistical Supplement, was a decline in Foreign Currency Assets (FCAs). FCAs fell by $4.48 billion, settling at $593.75 billion. However, gold reserves increased by $1 billion, taking the total to $68.5 billion. The Special Drawing Rights (SDRs) and reserve position with the International Monetary Fund (IMF) also saw minor declines of $52 million (now totaling $18.2 billion) and $9 million (now standing at $4.3 billion), respectively.
Global standing
India's economic strength secures global forex position
Despite recent fluctuations, India's strong economic growth has catapulted it into the world's largest foreign exchange reserves holders. It now occupies the fourth position in the world, behind China, Japan, and Switzerland. This achievement highlights India's transformation from being a part of the 'Fragile Five' to one of the fastest-growing major economies in the world.