India's forex reserves decline for 2 consecutive weeks to $696.67B
What's the story
India's foreign exchange reserves have witnessed a decline of $3.06 billion, bringing the total down to $696.67 billion for the week ending July 11. This marks the second consecutive week of decline, data released by the Reserve Bank of India (RBI) showed. In the previous reporting week (July 4), India's forex reserves also saw a slight drop of $3.049 billion to settle at $699.736 billion.
Reserve components
Major chunk of reserves sees dip
The decline in forex reserves for the week ending July 11 can be attributed mainly to a fall in foreign currency assets. These assets, which make up a major chunk of India's forex reserves, fell by $2.477 billion to $588.81 billion during this period. Gold reserves, another key component of these reserves, also saw a sharp fall of $498 million to $84.348 billion during the same period.
IMF holdings
India's SDRs with IMF also fall
India's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) also saw a dip of $66 million to $18.802 billion, during the reporting week of July 11. The Reserve Position in the IMF witnessed a decrease by $24 million, according to RBI data. These changes further highlight the fluctuations in India's forex reserves during this period.
Gold accumulation
Gold a key component of India's forex reserves
Central banks across the globe are increasingly adding gold to their foreign exchange reserves, and India is no exception. The share of gold held by the RBI in its forex reserves has nearly doubled since 2021. In 2023 alone, India added some $58 billion to its forex reserves, contrasting with a cumulative decline of $71 billion in 2022.